Journal entry

Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. Allied made its first and only purchase of inventory for the period on May 3 for 2.000 units at a price of $12 cash per unit (for a total cost of $24,000). Allied sold 1.000 of the units in inventory for $16 per unit (invoice total: $16,000) to Macy Co. under credit terms 2/10, n/60. The goods cost $12,000 to Allied. Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1, 600). Allied restores the units, which cost $1, 200, to its inventory. Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied sends Macy a credit memorandum for $800 toward the original invoice amount to compensate for the damage. Allied receives payment from Macy for the amount owed on the May 5 purchase: payment is net of returns, allowances, and any cash discount. Prepare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale. (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.)