2. Which of the below items are likely to be reported on New Books' external financial statements, and which items will be combined behind the scenes? 3. Prepare the journal entries to record New Books transactions. (If no entry is required for a transoction/event, select "No journal entry required in the first account field.) 1 Record the sales on account of $645,000 to Readers' Corner. 2 Record the cost of goods sold of $453,000. 3 Record the return of $13,000 unsatisfactory merchandise by Readers' Corner for which credit was given to the customer. 4 Record the receipt of payment in full frd hy Readers' Corner. The transactions listed below are typical of those involving New Books inc. and Readers' Comer. New Books is a wholesale merchandiser and Readers' Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers' Comer are made with terms 3/10,n/30, and that the two companies use perpetual inventory systems. Assume the following transactions befween the two companies occurred in the order listed during the year ended August 31 a. New Books sold merchandise to Readers' Corner at a seling price of $645,000. The merchandise cost New Books $453,000 b. Two days later, Readers' Corner complained to New Books that some of the merchandise differed from what Readers' Corner had. ordered. New Books agreed to give an allowance of $13,000 to Readers' Comer c. Just three days later, Readers' Comer paid New Books, which settled all amounts owed Required: 1. For each of the events (a) through (c). indicate the amount and direction of the effect on New Books in terms of the following itemis. (Enter any decreases to occount bolances with o minus sign.)