***See attached images for clearer information*** Recording Purchases?Perpetual System

On July 1, Alvarez, Inc. purchased merchandise for $2,500, 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.

July	1	Answer

Answer	Answer
		Answer

Answer	Answer
		To record purchase of merchandise, terms 2/10, n/30.
	5	Answer

Answer	Answer
		Answer

Answer	Answer
		To record returned merchandise.
	8	Answer

Answer	Answer
		Answer

Answer	Answer
		Cash	Answer	Answer
		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.

July	14	Answer

Answer	Answer
		Answer

Answer	Answer
		To record the paid amount due on the July 1 purchase.