I'm working on the following problem: Sampson Co. sold merchandise to Batson Co. on account, $46,000, terms 2/15, net 45. The cost of the merchandise sold is $38,500. Sampson Co. issued a credit memo for $1,500 for merchandise returned that originally cost $950. The Batson Co. paid the invoice within the discount period. I need help in the Seller journal entries. Currently I have:

A/R Batson Co. $46,000

Sales $46,000

Cost of goods sold $38,500

Merchandise Inventory $38,500

Sales $1,500

A/R Batson Co. $1,500

Merchandise Inventory $950

Cost of goods sold $950

Cash $44,500

A/R Batson Co. $44,500

My questions are:

1.) For the merchandise inventory returned originally cost do I put it as The $950 above or do I put the discounted price calculated from the buyer side as $890?

2.) For the final entry am I putting the $44,500 that was the original total or do I put the Cash amount only of $43,610? ($44,500 - $890 [2/15] = $43,610)