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.

August 1 Purchased merchandise from Aron Company for $7,088 under credit terms of 1/10, n/30, FOB destination, involce

dated August 1.

August 5 Sold merchandise to Baird Corporation for $4,988 under credit terms of 2/18, n/60, FOB destination, Involce

dated August 5. The merchandise had cost $3,080.

August 8 Purchased merchandise from Waters Corporation for $6,080 under credit terms of 1/10, n/45, FOB shipping point,

invoice dated August 8.

August 9 Paid $270 cash for shipping charges related to the August 5 sale to Baird Corporation, August 10 Baird returned merchandise from the August 5 sale that had cost Lowe's $508 and was sold for $1,888. The

merchandise was restored to inventory.

August 12 After negotiations with Waters Corporation concerning problens with the purchases on August 8, Lowe's received a price reduction from Waters of $600 off the $6,008 of goods purchased. Lowe's debited accounts payable for

$600.

August 14 At Aron's request, Lowe's paid $200 cash for freight charges on the August 1 purchase, reducing the asount

owed (accounts payable) to Aron.

August 15 Received balance due from Baird Corporation for the August 5 sale less the return on August 18.

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

August 19 Sold merchandise to Tux Company for $4,200 under credit terms of n/10, FOB shipping point, invoice dated

August 19. The merchandise had cost $2,100.

August 22 Tux requested a price reduction on the August 19 sale because the merchandise did not seet specifications, Lowe's gave a price reduction (allowance) of $700 to Tux and credited Tux's accounts receivable for that

amounts

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

22.

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