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 $4,000 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.

April 3 Paid $390 cash for shipping charges on the April 2 purchase.

April 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $500.

April 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.

April 18 Purchased $7,300 of merchandise from Frist Corporation with credit terms of 1/10, n/30, invoice dated