III. P5-78. Journal Entries for Merchandise Transactions-Periodie System.Drake Company was established on July 1. Its sales terms are 2/10, 1/30. Credit terms for its purchases vary with the supplier. Selected transactions for the first month of operations are given below. Unless noted, all transactions are on account and involve merchandise held for resale. All purchases are recorded using the periodic inventory accounting system July 1 Purchased goods from Dawson, Inc., S1,000; terms 1/10, 1/30, 2 Purchased goods from Penn Company, $2,000; terms 2/10, n. 30. 3 Paid freight on shipment from Dawson, S100 5 Sold merchandise to Ward, Inc. $3,000 5 Paid freighton shipment to Ward, Inc., $200. (Hint: debit Delivery Expense) 8 Returned S100 worth of the goods purchased July 1 from Dawson, Inc., because some goods were damaged. Dawson approved the return. 9 Received returned merchandise from Ward, Inc., 51000 10 Paid Dawson, Inc., the amount due 10 Purchased goods from Dorn Company with a price of $4,000. Terms 2/10, 1/30, 11 Paid freight on shipment from Dom Company, $300. 15 Received the amount due from Ward, Inc. 15 Sold merchandise to Colby Corporation, $5.000. 16 Mailed a check to Penn Company for the amount due on its July 2 invoice. 18 Received an allowance of $300 from Dor Company for defective merchandise Purchased on July 10 19 Paid Dor Company the amount due