1. Journalize the following transactions for Powell Company using the gross method of accounting for sales discounts. Assume a perpetual inventory system. Also, assume a constant gross profit ratio for all items sold. Make sure to enter the day for each separate transaction.
2. January 7   Sold goods costing $7,860 to Stewart Company on account, $13,100, terms 5/10, n/30.
3. January 13   Stewart Company was granted an allowance of $2,620 for returned merchandise that was previously purchased on account. The returned goods are in perfect condition.
4. January 18   Received the amount due from Stewart Company. 
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6. Required: Prepare journal entry.