Waterway Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts.

$($a$)$ On July $1,(1)$ Waterway purchased $$41,000$ of inventory, terms $\frac{2}{10},\frac{n}{30},$ FOB shipping point. $(2)$ Waterway paid freight costs of $$1,198.$

$($b$)$ On July $3,$ Waterway returned damaged goods and received credit of $$4,100.$

$($c$)$ On July $10,$ Waterway paid for the goods.

Prepare all necessary journal entries for Waterway. $($ff no entry is required, select $"$No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.$)$

No$.$

Date

Account Titles and Explanation

Debit

Credit

$($a$)(1)$