Prepare journal entries to record the following sales transactions in Trig Company’s books. Trig uses a perpetual inventory system and the contract-based approach to revenue recognition. Management estimates that 10% of sales will be returned by customers within the 10-day return period.

Feb. 2 Trig sold $16,000 of merchandise to Kotter Company, terms n/30, FOB shipping point.

The cost of the merchandise sold was $6,400.

4 The correct company paid freight costs of $215.

6 Kotter Company returned $1,600 of the merchandise purchased on February 2 because it was not needed. The cost of the merchandise returned was $640, and it was restored to inventory.

Mar. 1 Trig received the balance due from Kotter.