Merchandise with a list price of $7,500 and a cost of $7,000 is sold on account, terms 1/10, n/30. Prior to payment, merchandise with a list price of $1,000 and a cost of $800 is returned. The correct amount is paid within the discount period.

Record the following transactions, using the integrated financial statement framework that follows:

I have attempted the start of this problem but I am not sure it is correct and am struggling to solve the rest of this problem. Would you be able to help me solve it as well as explain why the correct answer would be what it is? Thank you!

C. Received the amount owed. If all the financial statements doesn't require any entry. Select "No Effect" and enter "O" in amount field. Cash Assets = Liabilities + Stockholders' Equity Accounts Receivable Merchandise Inventory Accounts Payable Capital Stock Retained Earnings 1 -6,500 735 6,435 Statement of Cash Flows Income Statement Operating 6,435