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Journal Entries for Merchandise Transactions on Seller's and Buyer's Books-Perpetual System The following are selected transactions for Candello, Inc., during the month of June: June 18 Sold and shipped on account to Dante Company, $6,000 ($5,000 cost) of merchandise, with terms of 2/10, n/30. 25 Dante Company returned merchandise billed at $600 on June 21 ($500 cost.) 27 Received from Dante Company a check for full settlement of the June 21 transaction Required Prepare the necessary journal entries for (a) Candello, Inc., and (b) Dante Company. Both companies use the perpetual inventory system a. CANDELLO, INC. GENERAL JOURNAL Date Description Debit Credit June 18 Accounts Receivable 6,000 Sales Revenue 6,000 Sold merchandise to Dante Company terms 2/10, n/30. 18 Cost of Goods Sold 5,000 Inventory 5,000 Cost of merchandise sold to Dante Company. 25Sales Returns and Allowances 600 Accounts Receivable 600 Merchandise returned by Dante Company 25 nventory 500 Cost of Goods Sold 500 Cost of merchandise returned by Dante Company 27 Cash Sales Discounts Accounts Receivable Received amount due from Dante Company DANTE COMPANY GENERAL JOURNAL Date Description Debit Credit June 18 Inventory 6,000 Accounts payable 6,000 Purchased merchandise from Candello, Inc.; terms 2/10, n/30 25 Accounts pavable 600 Inventory 600 Returned merchandise to Candello, Inc. 27 Accounts pavable Inventory Cash Paid amount due to Candello, Inc