Prepare journal entries for the following merchandising transactions of Powell Company assuming it uses a perpetual inventory system and the gross method.

May 1	Powell purchased merchandise with a price of $875 and credit terms of n/30.
May 12	Powell returned merchandise that had a price of $125.
May 31	Powell paid the amount due from the May 1 purchase, minus the May 12 return.
June 3	Powell sold merchandise for $450, with credit terms n/15. Cost of the merchandise is $300.
June 5	The customer discovers some of the units are scratched. Powell gives a price reduction (allowance) and credits the customers accounts receivable for $20 to compensate for the scratches.
June 18	Powell received payment for the amount due from the June 3 sale less the June 5 allowance.