Textbook Problem

Recording Purchase and Sales Transactions

Raymond Company and Geeslin Company both use a perpetual inventory system. The following transactions occurred during the month of January:

Jan. 1 Raymond purchased $5,000 of merchandise on account from Geeslin with credit terms of 2/10, n/30. The cost of the merchandise was $3,750. Assume that Geeslin uses the net method to record sales discounts and no returns are expected at the time of sale.

8 Raymond returned $500 of the to Geeslin. The cost of the merchandise returned was $375.

10 Raymond paid invoices totaling $3,000 to Geeslin for the merchandise purchased on January 1.

30 Raymond paid Geeslin the balance due.

Required:

Prepare the journal entries to record these transactions on the books of Raymond and Geeslin.