LO2 E5-5A. Recording Purchases Perpetual System On July 1. Alvarez, Inc. purchased merchandise for $2,500, with terms of 2/10, n/30. On July 5, the firm returned $800 of the merchandise to the seller Payment of the account occurred on July 8. Alvarez uses the perpetual inventory system Required a. Prepare the journal entries for July I, July 5, and July 8. h. Assuming that the account was paid on July 14, prepare the journal entry for payment on that date