Prepare journal entries to record the following merchandising transactions of Sheng Company.
Aug. 

1 Purchased merchandise from Arotek Company for \($7,500\) under credit terms of 1/10, n/30, invoice dated August 1.
8 Purchased merchandise from Waters Corporation for \($5,400\) under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. The invoice showed that at Sheng’s request, Waters paid the \($140\) shipping charges and added that amount to the bill. (Discounts are not applied to freight and shipping charges.)
12 After negotiations with Waters Corporation concerning problems with the merchandise purchased on August 8, Sheng received a credit memorandum from Waters granting a price reduction of \($700.\)
18 Paid the amount due Waters Corporation for the August 8 purchase less the price reduction granted.
30 Paid Arotek Company the amount due from the August 1 purchase.