Required information PA6-2 (Algo) Reporting Sales Transactions between Wholesale and Retail Merchandisers Using Perpetual Inventory Systems [LO 6-4, LO 6-6] [The following information applies to the questions displayed below.] The transactions listed below are typical of those involving New Books Incorporated 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 n/30, and 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' Comer at a selling price of $590,000. The merchandise had cost New Books $431,000. 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 $14,000 to Readers' Corner. Readers' Corner also returned some books, which had cost New Books $2,800 and had been sold to Readers' Corner for $4,300. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. PA6-2 (Algo) Part 2 2. Prepare the journal entries New Books would record. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet View transaction list Journal entry worksheet < 1 2 3 4 5 Record the sales on account of $590,000 to Readers' Corner on terms n/30. Note: Enter debits before credits.. Transaction a(1) General Journal Debit Credit Clear entry View general journal Record entry View transaction list 1 Record the sales on account of $590,000 to Readers' Corner on terms n/30. 2 Record the cost of goods sold of $431,000. 3 Record the returns and allowances granted to Reader's Corner. 4 Record the cost of goods sold adjustment to inventory. 5 Record the receipt of payment in full from Readers' Corner, Note: = journal entry has been entered Record entry EX n/30. Credit Clear entry View general journal