Prepare journal entries to record each of the following transactions of a merchandising company. Show any supporting calculations. Assume a perpetual inventory system.
March 5: Purchased 500 units of product with a list price of $5 per unit. The purchaser was granted a trade discount of 20% and the terms of the sale were 2/10 n/60.
March 7: Returned 50 defective units from the March 5 purchase and received full credit.
March 15: Paid the amount due resulting from the March 5 purchase, less the return on March 7.