Problem
Recording Purchases-Perpetual System
On July 1, Alvarez, Inc. purchased merchandise for $3,800 with terms of 2/10, n/30. On July 5, the firm returned $800 of the merchandise to the seller. Payment of the account occurred on July 8. Alvarez uses the perpetual inventory system.
Required
a. Prepare the journal entries for July 1, July 5, and July 8.
b. Assuming that the account was paid on July 14, prepare the journal entry for payment on that date.