Exercise 5: Prepare journal entries to record the following merchandising transactions of Dean Company, which applies the perpetual inventory system. Dean Company offers all of its credit customers credit terms of 2/10, n/30. May 1 Purchased merchandise from Swift Company for $7,800 under credit terms of 1/10, n/30, FOB shipping point, invoice dated May 1. 2 Purchased merchandise from Arrow Company for $10,600 under credit terms 2/5, n/20, FOB destination. 3 Sold merchandise to Bee Company for $5,600, FOB shipping point, invoice dated May 4. The merchandise had cost $3,000. 4 Paid $300 cash for the freight charges on the May 1 purchase of merchandise. 5 Received an $800 credit memorandum from Swift Company for the return of part of the merchandise purchased on May 1. 6 Paid Arrow Company the balance due within the discount period. 8 Sold merchandise to Nat Company for $3,300, FOB shipping point, invoice dated May 8. The merchandise had a cost of $1,500. 11 Paid Swift Company the balance due within the discount period. 13 Received the balance due from Bee Company within the discount period. 14 Issued a credit $300 credit memorandum to Nat Company for an allowance on defective merchandise. 17 Received the balance due from Nat Company within the discount period. Date May 1 2 3 4 5 6 8 Account Title Debit Credit 11 13 14 17