Problem $4-2$A $($Algo$)$ Preparing journal entries for merchandising activities LO P$1,$ P$2$

Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and

the gross method.August $1.$

August $5$ Sold merchandise to Baird Corporation for $$5,600$ under credit terms of $2/10,$ n$/60,$ FOB destination, invoice dated August

The merchandise had cost $$4,000.$

August $8$ Purchased merchandise from Waters Corporation for $$7,000$ under credit terms of $1/10,$ n$/45,$ FOB shipping point, invoice

dated August $8.$

August $9$ Paid $$280$ cash for shipping charges related to the August $5$ sale to Baird Corporation.

August $10$ Baird returned merchandise from the August $5$ sale that had cost Lowe's $$500$ and was sold for $$1,000.$ The merchandise wasAugust $12$ After negotiations with Waters Corporation concerning problems with the purchases on August $8,$ Lowe's received a priceAugust $14$ At Aron's request, Lowe's paid $$400$ cash for freight charges on the August $1$ purchase, reducing the amount owed $($accountsAugust $15$ Received balance due from Baird Corporation for the August $5$ sale less the return on August $10.$

August $18$ Paid the amount due Waters Corporation for the August $8$ purchase less the price allowance from August $12.$

August $19$ Sold merchandise to Tux Company for $$4,800$ under credit terms of n$/10,$ FOB shipping point, invoice dated August $19.$ TheAugust $22$ Tux requested a price reduction on the August $19$ sale because the merchandise did not meet specifications. Lowe's gave aAugust $29$ Received Tux's cash payment for the amount due from the August $19$ sale less the price allowance from August $22.$

August $30$ Paid Aron Company the amount due from the August $1$ purchase.