Karns Company purchased merchandise on account from Bailey Office Suppliers for $174,000, with terms of 2/10, 1/30. Durin the discount period, Karns returned some merchandise and paid $156,800 as payment in full. Karns uses a perpetual inventory system. Prepare the journal entries that Karns Company made to record: (1) the purchase of merchandise. (2) the return of merchandise (3) the payment on account (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit No. Account Titles and Explanation (1) I (2) (3) (