Recording Sales Transactions Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April: a. On April 1, Mathis Company purchased merchandise on account from Reece Company with credit terms of 2/10, n/30. The selling price of the merchandise was $4,000, and the cost of the merchandise sold was $2,450. b. On April 1, Mathis paid freight charges of $100 cash to have the goods delivered to its warehouse. c. On April 8, Mathis returned $1,000 of the merchandise which had originally cost Reece $700. d. On April 10, Mathis paid Reece the balance due. Required: Prepare the journal entries to record these transactions on the books of Reece Company. Assume that Reece uses the net method to record sales on account. For a compound transaction, if an amount box does not require an entry, leave it blank. April 1 Accounts Receivable 4,000 x Accounts Payable x 4,000 x (Recorded sale on account) April 1 Cost of Goods Sold 2,450 Inventory 2,450 (Recorded cost of merchandise sold) April 8 Accounts Payable x 1,000 x Inventory X 1,000 X (Recorded return of merchandise) April 8 Cost of Goods Sold x 700 Cash x 700 (Recorded cost of merchandise returned) April 10 Inventory x 3,920 Cash X 3,920 x --- -- - -- ------ ...LL- J