The following information is available regarding a sales transaction between AAA Company and BBB Corporation.

a.On July 2, 2014, AAA Company sold to BBB Corporation merchandise with a sales price of $6,000 (cost $3,600) with terms of 2/10. n/30 f.o.b. shipping point.

b.AAA Company estimates that merchandise with a sales value of $600 will be returned.

c.An invoice totaling $120, terms n/30, was received by BBB Corporation on July 6 from XYZ Delivery Service for the freight cost.

d.Upon receipt of the goods, on July 3, BBB Corporation notified AAA Comapy that $250 of merchandise contained flaws. The same day, AAA Company issued a credit memo covering the defective merchandise and asked that it be returned at AAAs expense.

e.Management at AAA Company estimates the returned items have a fair value of $100. The freight on the returned merchandise was $20 paid by AAA Company on July 7.

f.On July 12, AAA Company received a check for the balance due from BBB Corporation.

Using the attached T-account template, prepare AAA Companys journal entries, in T-account format, to recognize all the events listed above.

Note: AAA Companys policy is to record sales and receivables at the gross selling price.

Please answer in T account