Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method.Hint:It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable?Aron.

Aug.

1Purchased merchandise from Aron Company for $9,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.

5Sold merchandise to Baird Corp. for $6,300 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,000.

8Purchased merchandise from Waters Corporation for $8,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8.

9Paid $230 cash for shipping charges related to the August 5 sale to Baird Corp.

10Baird returned merchandise from the August 5 sale that had cost Lowe's $500 and was sold for $1,000. The merchandise was restored to inventory.

12After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a price reduction from Waters of $800 off the $8,000 of goods purchased. Lowe's debited accounts payable for $800.

14At Aron's request, Lowe's paid $140 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron.

15Received balance due from Baird Corp. for the August 5 sale less the return on August 10.

18Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12.

19Sold merchandise to Tux Co. for $5,400 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,700.

22Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's gave a price reduction (allowance) of $900 to Tux, and credited Tux's accounts receivable for that amount.

29Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22.

30Paid Aron Company the amount due from the August 1 purchase.

No Date General Journal Debit Credit 1 Aug 01 Merchandise inventory O 9,000 Accounts payable-Aron 9,000 2 Aug 05 Accounts receivable-Baird 6,300 Sales 6,300 3 Aug 05 Cost of goods sold 4,000 Merchandise inventory 4,000 Aug 08 Merchandise inventory 8,000 Accounts payable-Waters 8,000 5 Aug 09 Delivery expense O 230 Cash 230 Aug 10 Sales returns and allowances 1,000 Accounts receivable-Baird 1,000 Aug 10 Merchandise inventory 500 Cost of goods sold 500 Aug 12 Accounts payable-Waters 800 Merchandise inventory 800 Aug 14 Accounts payable-Aron 140 Cash 140 10 Aug 15 Cash 5,194 Sales discounts 106 Accounts receivable-Baird 5,300 11 Aug 18 Accounts payable-Waters OX Merchandise inventory OX Cash X 12 Aug 19 Accounts receivable-Tux O 5,400 Sales 5,400 13 Aug 19 Cost of goods sold 2,700 Merchandise inventory 2,700 14 Aug 22 Sales returns and allowances 900 Accounts receivable-Tux 900 15 Aug 29 Cash OX Accounts receivable-Tux 16 Aug 30 Accounts payable-Aron O O X Cash OX