Question 2 (4 marks) Prepare journal entries to record the following merchandising transactions of Cabela's, which uses the perpetual inventory system

Question 2 (4 marks) Prepare journal entries to record the following merchandising transactions of Cabela's, which uses the perpetual inventory system. July 1 Purchased merchandise from Boden Company for $6,600 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB destination, invoice dated July 2. The merchandise had a cost of $550. 3 Paid $110 cash for freight charges on the purchase of July 1. 4 Paid $100 cash for freight charges on the sale of July 2. 5 Gave a price reduction (allowance) of $50 to Creek Co. for merchandise sold on July 2. 11 Returned $1,000 of merchandise purchased on July 1 from Boden. 12 Received the balance due from Creek Co. for the invoice dated July 2. 16 Paid the balance due to Boden Company. Date Account titles Debit Credit 1/07 02/07 02/07 03/07 04/07 05/07 11/07 12/07 16/07