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Purchases Recorded Net Presented below are transactions related to Guillen, Inc. May 10 Purchased goods billed at $20,000 subject to cash discount terms of 2/10, n/60 11 Purchased goods billed at $15,000 subject to terms of 1/15, n/3019 Paid invoice of May 1024 Purchased goods billed at $11,500 subject to cash discount terms of 2/10, n/30
(a) Prepare general journal entries for the transactions above under the assumption that purchases are to be recorded at net amounts after cash discounts and that discounts lost are to be treated as financial expense.
(b) Assuming no purchase or payment transactions other than those given above, prepare the adjusting entry required on May 31 if financial statements are to be prepared as of that date.
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