Problem
On June 3, Arnold Company sold to Chester Company merchandise having a sale price of $4,100 with terms of 3/10, n/60, f.o.b. shipping point. An invoice totaling $96, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company.
Prepare journal entries:
(1) Sales and receivables are entered at gross selling price.
(2) Sales and receivables are entered at net of cash discounts.