Kelso Company purchased merchandise on account from Office Suppliers for $129,000, with terms of 2/10, n/30. During the discount period, Kelso returned some merchandise and paid $117,600 as payment in full. Kelso uses a perpetual inventory system.

Prepare the journal and show all steps. entries that Kelso Company made to record: (a) the purchase of merchandise. (b) the return of merchandise and show steps to the amount. (c) the payment on account.