Parolin Limited purchased equipment for an invoice price of $40,000, terms 2/10, n/30.
(a) Record the purchase of the equipment and the subsequent payment, assuming the payment was made within the discount period.
(b) Repeat (a), but assume the company's payment missed the discount period.
(c) What would be a good policy or procedure to adopt for purchases of property, plant, and equipment where a discount is offered, and how would it work?