On June 10, Vareen Company purchased \(\$ 8,000\) of merchandise from Harrah Company, FOB shipping point, terms \(3 / 10, n / 30\). Vareen pays the freight costs of \(\$ 400\) on June 11 . Damaged goods totaling \(\$ 300\) are returned to Harrah for credit on June 12. The fair value of these goods is \(\$ 70\). On June 19, Vareen pays Harrah Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Instructions

a. Prepare separate entries for each transaction on the books of Vareen Company.

b. Prepare separate entries for each transaction for Harrah Company. The merchandise purchased by Vareen on June 10 had cost Harrah \(\$ 4,800\).