Prepare journal entries to record each of the following transactions of a merchandising company. Show any supporting calculations. Assume a perpetual inventory system.
Mar. 5 Purchased 500 units of product with a list price of $5 per unit. The purchaser was granted a trade discount of 20% and the terms of the sale were 2/10, n/60.
7 Returned 50 defective units from the March 5 purchase and received full credit.
15 Paid the amount due resulting from the March 5 purchase, less the return on March 7 and applicable discount.