Fellgren Ltd. uses a perpetual inventory system. The company offers its customers credit terms of 2/10, n/30. Fellgrens suppliers offer credit terms of 1/10, n/30. The following activity occurred during the year ended December 31, 2010: 1. Sales for the year, all on credit, equalled $1,800,000. The company sets selling prices so that the cost of sales equals 40% of sales. The return rate = 2%. 2. Several customers were given sales allowances for agreeing to keep items that did not meet their expectations. These allowances amounted to $10,000. The sales allowances were given before the related accounts receivable were collected. 3. Accounts receivable collected during the period equalled $1,600,000. Accounts written off totaled $57,000; previously written off accounts of $6,000 were subsequently collected. Fellgren had $450,000 in outstanding A/R on January 1, 2010. 4. During the year, Fellgren purchased merchandise inventory, all on credit, costing $1,000,000. 5. On May 30, one of the companys suppliers agreed to accept $1,000 cash and a $40,000, 6%, 60-day note payable in exchange for an account payable in the amount of $41,000. The account payable was for an inventory purchase made by Fellgren on May 1, 2010. 6. The 60-day note payable (item 5) was paid, with interest, on the due date. 7. A year-end inventory count disclosed that the amount of physical inventory was $1,000 more than the amount in the inventory general ledger account. 8. The balance in the Allowance for Doubtful Accounts was $0 (zero) on January 1. Fellgren uses the percentage of receivables to estimate bad debts expense and determines that uncollectible accounts are expected to be 4% of the outstanding accounts receivable. Required a. Prepare the journal entries to record the above activities