An auto dealer uses a perpetual inventory system. The dealer incurred the following transactions during the month of May:
1. On May 1, the dealer purchased 10 vehicles on account at $20,000 each, with credit terms of 2/10, net 30.
2. On May 2, the dealer returned one vehicle due to a product defect.
3. On May 3, the dealer sold 5 vehicles for $25,000 each on account. The credit terms are n/30. No sales returns are expected.
4. On May 9, the dealer paid for the vehicles purchased less the return on May 2.
5. On May 31, the dealer collected one-half of the amount due from the May 3 sale.
6. On May 31, the dealer paid the rent for the next month of $2,500.
Required:
Prepare the journal entries for the dealer during the month of May. Explanations are not required.

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The Answer of An auto dealer uses a perpetual inventory system. The dealer incurred the following transactions during the month of May:
1. On May 1, the dealer purchased 10 vehicles on account at $20,000 each, with credit terms of 2/10, net 30.
2. On May 2, the dealer returned one vehicle due to a product defect.
3. On May 3, the dealer sold 5 vehicles for $25,000 each on account. The credit terms are n/30. No sales returns are expected.
4. On May 9, the dealer paid for the vehicles purchased less the return on May 2.
5. On May 31, the dealer collected one-half of the amount due from the May 3 sale.
6. On May 31, the dealer paid the rent for the next month of $2,500.
Required:
Prepare the journal entries for the dealer during the month of May. Explanations are not required.

An Auto Dealer Uses a Perpetual Inventory System