Early Payment Discount Jones Equipment is a private company that sells and installs HVAC systems. Jones offers

payment terms of 2/10, n/30, where customers making payment within 10 days of installation will receive a discount

of 2% off the purchase price or must pay the full balance due within 30 days. Jones has just received payment from

a new customer who paid within the 10-day window and is thus entitled to the 2% discount. The gross sales price of

the equipment and installation, before discount, was $10,000. This discount will not result in a loss to Jones on the

sale of the product and service. Jones needs your help to determine when the 2% early-payment discount should be

recognized and how it should be recordedfor example, as a reduction in revenue or as a cost of sales?

1. Citing from the guidance as support, show the approximate journal entries that Jones would make upon instal-

lation of the equipment and upon receipt of customer payment.

2. Explain how you located the relevant guidance,

including the search method used and which section you searched within the appropriate topic.