Prepare journal entries to record the following sales transactions in Wildhorse Company's books. Wildhorse uses a perpetual inventory system.
Jan. 2 Wildhorse sold $12,000 of merchandise to Xiaoyan Company, terms n/30, FOB shipping point. The cost of the merchandise sold was $4,740.
4 The correct company paid freight costs of $235.
6 Xiaoyan returned $1,700 of the merchandise purchased on January 2 because it was not needed. The cost of the merchandise returned was $669, and it was restored to inventory.
Feb. 2 Wildhorse received the balance due from Xiaoyan.