35. Prepare the necessary journal entries on the books of Kelly Carpet Company to record the following transactions, assuming a perpetual inventory system (you may omit explanations): Kelly purchased $40,000 of merchandise on account, terms 2/10, n/30. (a) Returned $3,000 of damaged merchandise for credit. (b) Paid for the merchandise purchased within 10 days. (c) 40,000 (a) Inventory. .. 40,000 Accounts Payable... 3,000 (b) Accounts Payable... Inventory 3,000 (c) Accounts Payable ($40,000 $3,000). Inventory ($37,000 x .02).. Cash ($37,000 $740). 37,000 740 36,260