C & S Company Purchased 80 Keyboards for $15 Each

question 82

Multiple Choice

C & S Company purchased 80 keyboards for $15 each from Keyboards-for-Less. When they unpacked the keyboards, C & S found that 30 of the keyboards were damaged in shipping. What is the journal entry that C & S will make to record the purchase return?

• A)Debit Purchase Returns and credit Inventory, $1,200.
• B)Debit Accounts Payable - Keyboards-for-Less and credit Inventory, $1,200.
• C)Debit Purchase Returns and credit Inventory, $450.
• D)Debit Accounts Payable - Keyboards-for-Less and credit Inventory, $450.

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Definitions:

Capital Lease

A lease agreement that grants a lessee control over an asset for a substantial portion of its useful life, and is recorded as an asset and liability on the balance sheet.

Lease Rate

The amount charged under a lease agreement for the use of an asset, often expressed as a payment amount per period.

Sales-Type Capital Lease

A leasing agreement in which the lessor recognizes immediate sales revenue and profit, reflecting the transaction as a sale rather than a rental.

Operating Lease

A lease agreement allowing the use of an asset but does not convey rights similar to ownership of the asset.