Problem
Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.
April 2 Purchased $5,700 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
April 3 Paid $220 cash for shipping charges on the April 2 purchase.
April 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $650.
April 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
April 18 Purchased $10,700 of merchandise from Frist Corporation with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.
April 21 After negotiations over scuffed merchandise, received from Frist a $600 allowance toward the $10,700 owed on the April 18 purchase.
April 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.