Save Money Grocery Company purchased $5,000 of produce from a local supplier on account. Two days later, one of the managers of Save Money Grocery noticed about $200 worth of produce was in poor quality and unable to sell. The local supplier graciously gave Save Money Grocery credit for the defective produce. Write the journal entries for both the purchase of the produce and the return of the produce with explanations.

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Save Money Grocery Company purchased $5,000 of produce from a local supplier on account. Two days later, one of the managers of Save Money Grocery noticed about $200 worth of produce was in poor quality and unable to sell. The local supplier graciously gave Save Money Grocery credit for the defective produce. Write the journal entries for both the purchase of the produce and the return of the produce with explanations.

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Date description Debit $ Credit $
1 Purchase A/c 5000
To Accounts Payable 5000
( Being entry for purchased
$5,000 of produce from a local supplier on account)
2 Accounts Payable 2000
Purchase  Return & Discounts 2000
(Being entry for credit for the defective produce)

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