Answer:
Journal entries for Arnold Company:
June 3, merchandise sold to Chester Company
Dr Accounts receivable 3,000
  Cr Merchandise inventory 3,000
Dr Cost of goods sold XXX (not specified)
  Cr Sales Revenue 3,000
June 12, payment received from Chester Company
Dr Cash 2,940
Dr Sales discounts 60 ($3,000 x 2%)
  Cr Accounts receivable 3,000
Journal entries for Chester Company:
June 3, merchandise purchased from Arnold Company
Dr Merchandise inventory 3,000
  Cr Accounts payable 3,000
June 8, shipping invoice received
Dr Merchandise inventory 90
  Cr Accounts payable
June 12, payment made to Arnold Company
Dr Accounts payable 3,000
  Cr Cash 2,940
  Cr Purchase discounts 60
June 12, payment made to John Booth transport
Dr Accounts payable 90
  Cr Cash 90
