Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method. April 2 Purchased \( \$ 4,600 \) of merchandise from Lyon Company with credit terms of \( 2 / 15 \), n/60, invoice dated April 2 , and Fob shipping point. April 3 Paid \( \$ 320 \) cash for shipping charges on the April 2 purchase. April 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of \( \$ 500 \). April 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. April 18 Purchased \( \$ 8,500 \) of merchandise from Frist Corporation with credit terms of \( 1 / 10 \), n/30, invoice dated April 18 , and FOB destination.

On April 2, the store made its first entry for the purchase of merchandise. This is recorded as a debit to Inventory and a credit to Accounts Payable, reflecting the total purchase amount of \( \$ 4,600 \). The entry looks like this: **April 2** ```plaintext Debit: Inventory $4,600 Credit: Accounts Payable $4,600 ``` The next day on April 3, shipping charges incurred for the merchandise bought were recorded. Since shipping was FOB shipping point, this cost is added to the inventory value, resulting in a debit to Inventory and a credit to Cash for the \( \$ 320 \) paid. **April 3** ```plaintext Debit: Inventory $320 Credit: Cash $320 ``` On April 4, a return of \( \$ 500 \) worth of merchandise requires a debit to Accounts Payable and a credit to Inventory. **April 4** ```plaintext Debit: Accounts Payable $500 Credit: Inventory $500 ``` By April 17, the company is ready to pay Lyon Company the outstanding amount after accounting for the discount from the remaining balance. The net purchase amount after the returns and the discount is calculated as \( \$ (4,600 - 500) \times 0.98 = \$ 4,164 \) recorded as a debit to Accounts Payable and a credit to Cash. **April 17** ```plaintext Debit: Accounts Payable $4,100 Credit: Cash $4,100 ``` Finally, on April 18, purchasing from Frist Corporation involves a debit to Inventory and a credit to Accounts Payable for the full amount of \( \$ 8,500 \), keeping in mind the payment terms. **April 18** ```plaintext Debit: Inventory $8,500 Credit: Accounts Payable $8,500 ``` Now, for some context—it’s like playing a game of Monopoly, where each property (inventory) you acquire increases your total wealth but also comes with costs (payables) and sometimes you need to flip a card (return items). Next, it’s important to track your cash flow like a game of Jenga! You want to ensure your foundations (accounts) are strong—you don’t want to pull a block (make an error) that leads to a collapse (financial trouble). So, double-checking each entry can save you a lot of headaches later on!