Problem 4-2A (Static) Preparing journal entries for merchandising activities LO P1, P2 Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. August 1 Purchaned merchandise from Aron Conpany for $7,500 under eredit terwi of 1/10, n/30, FoB destination, invoice dated Auqust 1 . August 5 Sold nerchandise to Baird Corporation for $5,200 under eredit terms of 2/10, 0/60, Fob destination, invoice dated August 5. The merchandine had cost $4,000. Auguat 8 Purchased merchandige from Watera Corporation for $5,400 under oredit teran of 1/10, n/45, poB shipping point, invoice dated nugust 8 . August 9 paid $125 cash for shipping chargen related to the August 5 sale to Baird Corporation. augunt 10 Baird returned merehandise from the August 5 sale that had cost Love' $400 and was sold for $600. The merchandise val rentored to inventory. Auguat 12 Mfter negotiations vith Watars Corporation concerning probleng with the purchasea on August B, Lowe's received a price reduction fron Waters of $400 off the $5,400 of goods purchased. Lowe's debitnd accounta payable for 5400. August 14 At Aron's request, Love's paid $200 cash for freight charges on the August 1 purchase, feducing the amolant oved (accounts payable) to Aron. August 15 Received balance due from Baird Corporation for the August 5 ssle lesa the retura on August 10 . August 18 Paid the amount due Watera Corporation for the Auguat 8 purchase loss the price allowance from August 12 . Aaguat 19 sold berehandise to Tux Company for $4,800 under eredit terma of n/10, Fop shipping point, invoice dated Auguat 19. The nerchandise had cost $2,400. August 22 Tux requented a price redaction on the August 19 male because the merchandise did not meet specifications. Tove's gave a price reduction (allowance) of $500 to Tux and credited Tux's accounts recelvable for that Adgust 29 Recelved Tux'a eanh payment for the amount due from the August. 19 sale less the price allowance from Rugust Auguat 30 Paid Xron Conpany the amount die from the Aughunt 1 purchase. Journal entry worksheet Journal entry worksheet Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10,n/30,FOB destination, Invoice dated August 1. Note: Enter debits before credits