Explanation:
The journal entries are as follows
On the books of Narveson Company
On October 5
Merchandise Inventory A/c $6,380
To Accounts payable A/c $6,380
(Being inventory purchased on credit)
On October 8
Accounts payable A/c Dr $740
To Merchandise Inventory A/c $740
On the books of Rossi Company
On October 5
Account receivable A/c Dr $6,380
To Sales $6,380
(Being the goods are sold on credit)
Cost of goods sold A/c Dr $3,310
To Merchandise Inventory A/c $3,310
(Being goods are sold at cost)
On October 8
Sales return and allowance A/c Dr $740
To Accounts receivable $740
(Being sales return is recorded)
Merchandise Inventory A/c $410
To Cost of goods sold A/c Dr $410
(Being sales return is recorded)
