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Merchandise with a list price of $3,800 and costing $2000 is sold on account, subject to the following terms: FOB shipping point, 2/10,n/. The seller prepays the $50 shipping charges and bills the customer, (seller pays Cash). Prior to payment for the goods, the seller issues a credit memo for $800 to the customer for merchandise costing $500 that is returned. The correct amount is received within the discount period. Record the foregoing transactions of the seller in the sequence indicated below.
1. Sold the merchandise, recognizing the sale and cost of merchandise sold.
2. Paid the transportation charges.
3. Issued the credit memorandum.
4. Received payment from the customer.
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