Madison Company uses the perpetual inventory system. Record the journal entries for the following transactions: a. On July 16, Madison sold $500 of merchandise with terms of 3/10, n/30. The cost of the merchandise was $200. b. On July 19, the customer returned $100 of the merchandise from (a). The cost of the merchandise was $40. c. On July 22, the customer paid the entire balance due to Madison.Madison Company uses the perpetual inventory system. Record the journal entries for the following transactions: a. On July 16, Madison sold $500 of merchandise with terms of 3/10, n/30. The cost of the merchandise was $200. b. On July 19, the customer returned $100 of the merchandise from (a). The cost of the merchandise was $40. c. On July 22, the customer paid the entire balance due to Madison. General Journal Ref. Description Debit Credit a. To record sale of merchandise. To record cost of merchandise sold. b. To record return of merchandise sold. To record cost of merchandise sold. c. Cash