Question $1$

The transactions listed below are typical of those involving New Books Inc. and Readers$$ Corner. New Books is a wholesale merchandiser and Readers$$ Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers$$ Corner are made with terms $2/10,$ n$/30,$ and that the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August $31.$

a$.$ New Books sold merchandise to Readers$$ Corner at a selling price of $$550,000.$ The merchandise cost New Books $$415,000.$

b$.$ Two days later, Readers$$ Corner complained to New Books that some of the merchandise differed from what Readers$$ Corner had ordered. New Books agreed to give an allowance of $$10,000$ to Readers$$ Corner.

c$.$ Just three days later, Readers$$ Corner paid New Books, which settled all amounts owed.

Requirement $1$: Indicate the effect $($direction and amount$)$ of each transaction on the Inventory balance of Readers$$ Corner.

Requirement $2$: Prepare the journal entries that Readers$$ Corner would record and show any computations. $($If no entry is required for a transaction$/$event$,$ type $"$No journal entry required"$)$