INSTRUCTIONS:

Prepare the journal entries to record the transactions assuming that JAR Bike Shop uses a PERPETUAL INVENTORY SYSTEM.

JAR Bike Shop had beginning inventory of 10 bicycles costing $400 each. During March, the following transactions took place: 1-Mar Purchased 5 bicycles at a cost of $400 each from Pivot Cycles, terms 2/10, net 30. 4-Mar Sold 3 bicycles to Team Boston for $750 each, terms 2/10, net 30. 5-Mar Returned 1 bike damaged in shipping to Pivot and received a credit for the retum. 7-Mar Issued a credit memo to Team Boston for the return of 1 bike that was the wrong size. 8-Mar Paid Pivot Cycles in full, less discount.