Question $2$

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 $2/10,\frac{n}{30},$ 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 $1$: $(25$ Marks$)$

Prepare the journal entries to record New Books transactions. $($If no entry is required for a

transaction$/$event$,$ type $"$No journal entry required"$)$