Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment, which applies the perpetual inventory system and the gross method of recording invoices.

\begin{array}{|l|l|}\hline \text { May 1 } & \begin{array}{l}\text { Purchased merchandise from Kona Company for } \$ 12,700 \text { under credit } \\\text { terms of } 2 / 15, \mathrm{n} / 45, \mathrm{FOB} \text { destination, and invoice dated May } 1 .\end{array} \\\hline 3 & \begin{array}{l}\text { Sold merchandise to Walton for } \$ 8,000 \text { under credit terms of } 1 / 10, \mathrm{n} / 30, \\\text { FOB destination, invoice date May } 3 . \text { The merchandise had cost } \$ 5,000 .\end{array} \\\hline 5 & \begin{array}{l}\text { Returned } \$ 2,000 \text { of the merchandise purchased on May } 1 \text { to Kona } \\\text { Company. }\end{array} \\\hline 6 & \begin{array}{l}\text { Walton returned merchandise from the May } 3 \text { sale that had cost Martinez } \\\$ 625 \text { and had been sold for } \$ 1,000 . \text { The merchandise was restored to } \\\text { inventory. }\end{array} \\\hline 13 & \text { Received the balance due from Walton less the return. } \\\hline 14 & \text { Paid the amount due Kona Company. } \\\hline\end{array}

Jasper Company Is a Wholesaler That Buys Merchandise in Large

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