During July of the current year, Bobby’s Auto Repair engaged in the following transactions involving car mirrors purchased from Prisms, Inc.:
July 1 Purchased ten car mirrors from Prisms, Inc., for $25 each; terms 2/10, n/30.
July 5 Sold six car mirrors on credit for $40 each; terms 1/10, n/30.
July 7 Two car mirrors sold on July 5 were returned by the customers because the mirrors were flawed.
July 9 Returned the two flawed mirrors to Prisms, Inc. for credit.
July 11 Paid the amount due Prisms, Inc. for the car mirrors purchased on July 1.
July 15 Received the amount due from customers who purchased car mirrors on July 5.
Required:
Prepare the journal entry for each transaction listed, assuming that Bobby’s Auto Repair uses a perpetual inventory system.