Illustration: Assume that Jordache Co. on July 1, 2020, sells merchandise on account to Polo Company for $1,000, terms 2/10, n/30. On July 5, Polo returns merchandise with a sales price of $100 to Jordache Co. Prepare the journal entries to record these transactions. July 1 Accounts Receivable 1,000 Sales Revenue 1,000 (To record sales on account) July 5 Sales Returns and Allowances 100 Accounts Receivable 100 (To record merchandise returned) Illustration: On July 11, Jordache receives payment from Polo Company for the balance due. Prepare the journal entire to record this transaction. July 11 Cash ($900 $18) 882 Sales Discounts ($900 x .02) 18 Accounts Receivable 900 (To record collection of accounts receivable)