Prepare Journal Entries to Record the Following Merchandising Transactions of Margin

Essay

Prepare journal entries to record the following merchandising transactions of Margin Company, which applies the perpetual inventory system and the gross method of recording invoices. Margin Company offers all of its credit customers credit terms of 2/10, n/30.
$\begin{array}{|l|l|}\hline \text { May 1 } & \begin{array}{l}\text { Purchased merchandise from Craft Company for } \$ 7,800 \text { under credit terms } \\\text { of } 1 / 10, \mathrm{n} / 30, \mathrm{FOB} \text { shipping point, invoice dated May } 1 .\end{array} \\\hline \text { May 2 } & \begin{array}{l}\text { Purchased merchandise from Bow Company for } \$ 10,600 \text { under credit } \\\text { terms 2/05, n/20, FOB destination. }\end{array} \\\hline \text { May 4 } & \begin{array}{l}\text { Paid } \$ 300 \text { cash for the freight charges on the May 1 purchase of } \\\text { merchandise. }\end{array} \\\hline \text { May 5 } & \begin{array}{l}\text { Received an } \$ 800 \text { credit memorandum from Craft Company for the return } \\\text { of part of the merchandise purchased on May } 1 .\end{array} \\\hline \text { May 6 } & \text { Paid Bow Company the balance due within the discount period. } \\\hline \text { May 11 } & \text { Paid Craft Company the balance due within the discount period. } \\\hline\end{array}$