Problem 1 Prepare journal entries to record the following merchandising transactions of Lucky Merchandiser, Inc., 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. A 1 Purchased merchandise from Aron Company for $5,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. u g. 5 Sold merchandise to Baird Corp. for $3,500 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $2,000. 8 Purchased merchandise from Waters Corporation for $4,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. 1 0 Paid $110 cash for shipping charges related to the August 5 sale to Baird Corp. Baird returned merchandise from the August 5 sale that had cost Lucky's $500 and was sold for $1,000. The merchandise was restored to inventory. 1 2 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lucky's received a price reduction from Waters of $400 off the $4,000 of goods purchased. Lucky 's debited accounts payable for $400. 1 4 At Aron's request, Lucky's paid $320 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron.