A retailer purchased goods from its supplier for $$500$ on account with credit terms

stating a $4\%$ discount if the retailer pays within $10$ days. At the time of purchase, the

retailer expects to pay within the discount period. However, the retailer paid the

account balance on the $15$ th day after the date of purchase $($not within the discount

period$).$

Which of the following represents what the retailer will record on its bafance sheet

on the date of payment?

Decrease Cash $$480$; Decrease Accounts Payable $$480$

Decrease Cash $$500$; Decrease Accounts Payable $$500$

Decrease Cash $$500$; Decrease Accounts Payable $$500$; Decrease Retained

Earnings $$20$

Decrease Cash $$500$; Increase Inventory $$20$; Decrease Accounts Payable $$480$