Refer to Exercise and prepare journal entries to record each of the merchandising transactions assuming that the periodic inventory system is used by both the buyer and the seller.

In Exercise, On May 11, York Co. accepts delivery of $38,000 of merchandise it purchases for resale from Troy Corporation. With the merchandise is an invoice dated May 11, with terms of 3/10, n/90, FOB shipping point. The goods cost Troy $25,460. When the goods are delivered, York pays $520 to Express Shipping for delivery charges on the merchandise. On May 12, York returns $2,000 of goods to Troy, who receives them one day later and restores them to inventory. The returned goods had cost Troy $1,393. On May 20, York mails a check to Troy Corporation for the amount owed. Troy receives it the following day. (Both York and Troy use a perpetual inventory system.)

1. Prepare journal entries that York Co. records for these transactions.

2. Prepare journal entries that Troy Corporation records for these transactions.