Recording Purchases-Perpetual System On July 1, Alvarez, Inc. purchased merchandise for $3,800 with terms of 2/10, n/30. On July 5, the firm returned $800 of the merchandise to the seller. Payment of the account occurred on July 8. Alvarez uses the perpetual inventory system. Required a. Prepare the journal entries for July 1, July 5, and July 8. Date General Journal Description July 1 Inventory Accounts Payable To record purchase of merchandise, terms 2/10, n/30. 5 Accounts Payable Inventory To record returned merchandise. = = Debit Credit 8 Accounts Payable Cash Cash 0 = To record the paid amount due within the discount period for the July 1 purchase. b. Assuming that the account was paid on July 14, prepare the journal entry for payment on that date. Date General Journal Description July 14 Accounts Payable Cash To record the paid amount due on the July 1 purchase Debit Credit