1. Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment, which applies...

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1. Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment, which applies the perpetual inventory system and the gross method of recording invoices. May 1 Purchased merchandise from Kona Company for $12,700 under credit terms of 2/15, n/45, FOB destination, and invoice dated May 1. 16 Sold merchandise to Walton for $8,000 under credit terms of 1/10, n/30, FOB destination, invoice date May 3. The merchandise had cost $5,000. Paid $350 cash for shipping charges related to the May 3 sale. Returned $2,000 of the merchandise purchased on May 1 to Kona Company. Walton returned merchandise from the May 3 sale that had cost Martinez $625 and had been sold for $1,000. The merchandise was restored to inventory. 13 Received the balance due from Walton less the return. 14 Paid the amount due Kona Company. 1. Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment, which applies the perpetual inventory system and the gross method of recording invoices. May 1 Purchased merchandise from Kona Company for $12,700 under credit terms of 2/15, n/45, FOB destination, and invoice dated May 1. 16 Sold merchandise to Walton for $8,000 under credit terms of 1/10, n/30, FOB destination, invoice date May 3. The merchandise had cost $5,000. Paid $350 cash for shipping charges related to the May 3 sale. Returned $2,000 of the merchandise purchased on May 1 to Kona Company. Walton returned merchandise from the May 3 sale that had cost Martinez $625 and had been sold for $1,000. The merchandise was restored to inventory. 13 Received the balance due from Walton less the return. 14 Paid the amount due Kona Company.