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Problem 1: Buyer Co. regularly buys shirts from Vendor Company and is allowed trade discounts of 20% and 10% from the list price. Buyer purchased shirts from Vendor on May 27 and received an invoice with a list price of P100,000 and payment terms 2/10, n/30. If Buyer uses the net method of recording purchases, the journal entry to record the payment on June 8 will include
Group of answer choices
Option 1: A debit to Accounts payable of P72,000.
Option 2: A debit to Purchase Discounts Lost of P1,440.
Option 3: A credit to Purchase Discounts of P1,440.
Option 4: A credit to Cash of P70,560.
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