Be prepared to show how to record the journal entries for the following transactions and explain how they were prepared.

a) XYZ Co. sold merchandise to a customer for $1,000 less a trade discount of $100. The credit terms for the sale were 2/10 net/30. They use the gross method for cash discounts.

b) Five days after the sale, the customer returns 10% of the shipment.

c) Seven days after the sale, XYZ draws up a financial statement and estimates that there will be an additional return of 5% of the shipment.

d) Ten days after the sale, the customer pays the balance due less the 10% cash discount.