Answer:
<u>Journal entries for Arnold Company:</u>
June 3, merchandise sold to Chester Company
Dr Accounts receivable 3,000
Cr Merchandise inventory 3,000
Dr Cost of goods sold XXX (not specified)
Cr Sales Revenue 3,000
June 12, payment received from Chester Company
Dr Cash 2,940
Dr Sales discounts 60 ($3,000 x 2%)
Cr Accounts receivable 3,000
<u>Journal entries for Chester Company:</u>
June 3, merchandise purchased from Arnold Company
Dr Merchandise inventory 3,000
Cr Accounts payable 3,000
June 8, shipping invoice received
Dr Merchandise inventory 90
Cr Accounts payable
June 12, payment made to Arnold Company
Dr Accounts payable 3,000
Cr Cash 2,940
Cr Purchase discounts 60
June 12, payment made to John Booth transport
Dr Accounts payable 90
Cr Cash 90
