Eastman Corporation sells merchandise with a list price of $12,000 on February 1, 2019, with terms of 1/10, n/30. On February 10, 2019, payment was received on merchandise originally billed for $7,000, and the balance due was received on March 1, 2019. Required: 1. Prepare the journal entries to record the preceding information assuming that Eastman records accounts receivable and sales at (a) the gross price and (b) the net price. 2. Next Level What implied annual interest rate is Eastman's customer incurring by failing to take the cash (sales) discount? (Assume a 365-day year.) 3. Next Level Which methodrecording accounts receivable at the gross price or net priceis theoretically superior? Why? 1a. Prepare the journal entries to record the transactions assuming that Eastman records accounts receivable and sales at the gross price. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 1b. Prepare the journal entries to record the transactions assuming that Eastman records accounts receivable and sales at the net price. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 2. What implied annual interest rate is Eastman's customer incurring by failing to take the cash (sales) discount? (Assume a 365-day year.) Additional Instruction With a discount rate of 1% and assuming a 365-day year, Eastman's customer is incurring an annual interest rate of % 3. Which method-recording accounts receivable at the gross price or net priceis theoretically superior? Why? Recording receivables at the is the theoretically superior method because it values the receivable at the net realizable value and reports sales revenue at the amount that a company expects to be entitled. If receivables are recorded at their sales revenue is overstated