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No Date General Journal Debit Credit 1 May 11 Merchandise inventory 40,000 Accounts payable 40,000 2 May 12 No Transaction Recorded 3 May 20 No Transaction Recorded navod Prepare journal entries that Sydney Retailing records for these transactions. No Date General Journal Debit Credit 1 May 11 40,000 Purchases Accounts payable 40,000 2 May 11 40,000 X Merchandise inventory Accounts payable 40,000 3 May 12 386 X Accounts payable Discount on bonds payable Cash x 4 May 20 No Transaction Recorded Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $40,000 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $30,000. Sydney pays $345 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,400 of the $40,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,050. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. Assume that both buyer and seller use a periodic inventory system and the gross method. 1. Prepare journal entries that Sydney Retailing records for these transactions. 2. Prepare journal entries that Troy Wholesalers records for these transactions

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