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Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable-Aron.) Aug. 1 Purchased merchandise from Aron Company tor 95,000 under eredit terms of 1/10, n/30, PoB destination, invoice dated August 1. 5 Sold merchandise to Baird Corp. for $3,500 under credit terms of 2/10, n/60, FOB destination, invoice dated ,gust 5. The me rchandise had cost $2,000. 8 cchased merchandise from Waters Corporation for $4,000 under credit terma of 1/10, n/45, FOB shipping point, invoice dated August 8 9 Paid $130 cash for shipping charges related to the August 5 sale to Baird corp. handise from the August 5 sale that had cont Lowe' $500 and vas sold for $1,000. The merchandise was restored to inventory. Lowe's receiveda 12 After negot iations with Waters corporation concerning problema with the purchases on August 8 14 At Aron's request, Lowe's paid $120 cash for freight charges on the August 1 purchase, reducing the amount oved credit memorandum from Watera granting a price reduction of $400 off the $4,000 ot goods purchane to Aron. ed balance due from Baird Corp. for the August 5 sale less the return on August 10. 15 Receiv 18 Paid the amount due Waters Corporation for the August 8 purchase less the price allovance from August 12. 19 to Tux Co. for $3,000 under credit terms of n/10, FOB shipping point, invoice dated August 19. Sold merchandise The merchandise had cost $1,500. on the August 19 sale because the merchandise did not meet specifications. memorandum toward the invoice to resolve the issue 9 Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. 2 30 Paid Aron Company the amount due from the August 1 purchase. Lowe's sent Tux a $500 credit

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