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Question - Santa Fe Retailing purchased merchandise "as is" (with no returns) from Mesa Wholesalers with credit terms of 2/10, n/60 and an invoice price of $25,400. The merchandise had cost Mesa $17,323. Assume that both buyer and seller use a perpetual inventory system and the gross method.
Required -
1. Prepare entries that the buyer records for the (a) purchase, (b) cash payment within the discount period, and (c) cash payment after the discount period.
2. Prepare entries that the seller records for the (a) sale, (b) cash collection within the discount period, and (c) cash collection after the discount period.
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