Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment, Inc., which uses the gross method of accounting for purchases and sales and a perpetual inventory system. 
Definitions:
Allowance for Doubtful Accounts
A contra-asset account used to create an estimated reserve for debts that may not be collected.
Bad Debts Expense
An expense reported on the income statement, representing the estimated amount of credit sales that are not expected to be collected.
Allowance for Doubtful Accounts
A contra-asset account used to estimate the portion of accounts receivable that may not be collectible.
Bad Debts Expense
A non-cash expense that represents accounts receivable that a company no longer expects to collect, indicating customers are unlikely to pay their outstanding debts.
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