Preparing journal entries for merchandising activities P1 P2 Prepare journal entries to record the following merchandising transactions of Cabela's, which uses the perpetual inventory system and the gross method. July 1 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n30, FOB shipping point, invoice dated July 1. Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $500. Paid $125 cash for freight charges on the purchase of July 1. 2 3 8 Sold merchandise that had cost $1,300 for $1,700 cash. 9 11 12 Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. Returned $200 of merchandise purchased on July 9 from Leight Co. and debited its account payable for that amount. Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. Check July 12, Dr. Cash, $882 July 16, Cr. Cash, $5,940 16 Paid the balance due to Boden Company within the discount period. 19 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. 21 24 Gave a price reduction (allowance) of $100 to Art Co. for merchandise sold on July 19 and credited Art's accounts receivable for that amount. Paid Leight Co. the balance due, net of discount. July 24, Cr. Cash, $1,960 July 30, Dr. Cash, $1,078 30 Received the balance due from Art Co. for the invoice dated July 19, net of discount. 31 Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.