PA6-1 (Static) Reporting Purchase Transactions between Wholesale and Retail Merchandisers Using Perpetual Inventory Systems (LO 6-3] [The following information applies to the questions displayed below.) The transactions listed below are typical of those involving New Books Incorporated and Readers' Corner. New Books is a wholesale merchandiser and Readers' Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers' Corner are made with terms n/30, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31, a. New Books sold merchandise to Readers' Corner at a selling price of $550,000. The merchandise had cost New Books $415,000. b. Two days later, Readers' Corner complained to New Books that some of the merchandise differed from what Readers' Comer had ordered. New Books agreed to give an allowance of $10,000 to Readers' Corner. Readers' Corner also returned some books, which had cost New Books $2,000 and had been sold to Readers' Corner for $3,500. No further returns are expected. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. PA6-1 (Static) Part 2 2. Prepare the journal entries that Readers' Corner would record. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Required information 2. Prepare the journal entries that Readers' Corner would record. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 Record the purchase of $550,000 on account. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal < Prev 4 of 5 Next > View transaction list Journal entry worksheet < 1 2 3 Record the return of unsatisfactory merchandise for which credit was given. Note: Enter debits before credits. Transaction b. General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet 2 3 Record the payment in full. Note: Enter debits before credits. Transaction General Journal Debit Credit C Record entry Clear entry View general journal