Journalize the following transactions for Armour Inc. Oct. 7 Sold merchandise on credit to Rondo Distributors, for $1,200, terms n/30. The cost of the merchandise was $720. 8 Purchased merchandise, $10,000, terms FOB shipping point, 2/15, n/30, with prepaid freight charges of $525 added to the invoice. Journalize the transactions above using the periodic inventory system. If an amount box does not require an entry, leave it blank. Oct. 7 Oct. 8 Journalize the transactions above using the perpetual inventory system. Oct. 7 - Sale Cost Oct. 8

Explanation:

The journal entries are as follows

On October 7

Under periodic inventory

Account receivable $1,200

        To Sales revenue $1,200

(Being the sales revenue on credit basis is recorded)

Under perpetual inventory

Accounts receivable A/c Dr $1,200

             To Sales revenue A/c $1,200

(Being the sales revenue on credit basis is recorded)

Cost of goods sold A/c Dr $720

         To Merchandise inventory A/c $720

(Being the merchandise is sold at cost)

On October 8

Under periodic inventory

Purchase $10,000

Freight in $525

      To Account payable $10,525

(Being the purchase made on credit is recorded)

Under perpetual inventory

Merchandise inventory  $10,525

         To Account payable  $10,525

(Being the purchase made on credit is recorded)