A customer of J and J purchased $2 million dollars of merchandise on account. J & J Products gives terms of 2%, 10 days, net 30. J& J Products believes that the customer will take the discount if is equal to at least an 16% return. J & J Products uses the net method to record sales. Assume a 360-day year.

Required:

a. How percentage return will be earned by the customer if they make the payment within the discount period?

b. Make the entries on J & Js books assuming the customer pays within the discount period.

c. Make the entries on J & Js books assuming the customer does not pay within the discount period.

d. Make the entries on the customers books assuming they payed within the discount period.

e. Make the entries on the customers books assuming they failed to pay within the discount period.