On May 11, Smythe Co. accepts delivery of \($30,000\) of merchandise it purchases for resale from Hope Corporation. With the merchandise is an invoice dated May 11, with terms of 3/10, n/90, FOB ship¬ ping point. The cost of the goods for Hope is \($20,000.\) When the goods are delivered, Smythe pays \($335\) to Express Shipping for delivery charges on the merchandise. On May 12, Smythe returns \($1,200\) of goods to Hope, who receives them one day later and restores them to inventory. The returned goods had cost Hope \($800.\) On May 20, Smythe mails a check to Hope Corporation for the amount owed. Hope receives it the following day. (Both Smythe and Hope use a perpetual inventory system)

1. Prepare journal entries that Smythe Co. records for these transactions.

2. Prepare journal entries that Hope Corporation records for these transactions.