Exercise 5-3 (Algo) Recording purchases, purchases returns, and purchases allowances LO P1 Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method. April 2 Purchased $6,700 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2 , and FOB shipping point. April 3 Paid $340 cash for shipping charges on the April 2 purchase. April 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $750. April 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. April 18 Purchased $12,700 of merchandise from Frist Corporation with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination. April 21 After negotiations over scuffed merchandise, received from Frist a $500 allowance toward the $12,700 owed on the April 18 purchase. April 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount. Journal entry worksheet (2) 3 ( 4 ( 4 7 > Purchased $6,700 of merchandise from Lyon Company with credit terms of 2/15,n/60, invoice dated April 2, and FOB shipping point. Note: Enter debits before credits