Problem
Prepare journal entries to record each of the following transactions of a merchandiser. Show supporting calculations and assume a perpetual inventory system. Aug 1 Purchased merchandise on credit for $5,000, terms 5/10, n/30, and invoice dated August 1. Aug 6 Paid cash for purchase on August 1st. Aug 12 Sold merchandise on credit for $2,000 (cost $500), terms 2/10, n/60, and invoice dated August 12. Aug 19 Received cash payment from customer for purchase on August 12th.