How do prepare journal entries to record the transactions

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To illustrate the perpetual inventory system, we follow specific items of merchandise through the operating cycle of Star Track, a retail store. The transactions comprising this illustration are as follows:

Jan.1 Purchased 10 monitors on account from Okawa Wholesale Co. The monitors cost $600 each, for a total of $6,000; payment is due in 30 days.

Jan.7 Sold two monitors on account to RJ Travel Agency at a retail sales price of $1,000 each, for a total of $2,000. Payment is due in 30 days.

Feb.1 Paid the $6,000 account payable to Okawa Wholesale Co.

Feb.7 Collected the $2,000 account receivable from RJ Travel Agency.

Question 1: Prepare journal entries to record these transactions assuming that Star Track uses the perpetual inventory system.

Reference no: EM132609088

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