Problem
On May 11, Sydney Co. accepts delivery of $31,000 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 $20,770. When the goods are delivered, Sydney pays $500 to Express Shipping for delivery charges on the merchandise. On May 12, Sydney returns $2,000 of goods to Troy, who receives them one day later and restores them to inventory. The returned goods had cost Troy $1,340. On May 20, Sydney mails a check to Troy Corporation for the amount owed. Troy receives it the following day. (Both Sydney and Troy use a perpetual inventory system.)
Prepare journal entries that Troy Corporation records for these transactions.