On June 10, Naveen Company purchased $8,000 of merchandise from Jarrah Company,
FOB shipping point, terms 2/10, n/30. Naveen pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Jarrah for credit on June 12. The fair value of these goods is $70. On June 19, Naveen pays Jarrah Company in full, less the purchase discount. Both companies use a perpetual inventory system.
Instructions
(a) Prepare separate entries for each transaction on the books of Naveen Company.
(b) Prepare separate entries for each transaction for Jarrah Company. The merchandise purchased by Naveen on June 10 had cost Jarrah $4,800.