10:09 CO | 82% | . + F2021 MT2 Question 8 of 14

10:09 a 8 of 14 Martinez Corp., which uses a perpetual inventory system and charges 8% interest on the balance due if not paid within the payment terms and has an estimated return rate of 12%, sells merchandise on account to two customers: The first customer was Vertigo Inc. where Martinez sold $ 2,400 worth of merchandise on August 1, terms n/30. The goods had cost Martinez $ 1,200. On October 1 Vertigo paid the entire balance due. The second customer was Notorious Limited where Martinez sold $ 3,400 worth of merchandise on August 2, terms n/30. The goods had cost Martinez $ 1,700. On August 6, Notorious returned merchandise worth $ 680 to Martinez. This merchandise had a cost of $ 340 and there was nothing wrong with the merchandise. On August 11, Martinez received payment from Notorious for the balance due. Assuming that Martinez Corp. prepares adjusting entries on a monthly basis, prepare the appropriate journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) o