Gupta Custom Problem 6-1 Fern Data Recovery Services (FDRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. FDRS offers a 10% discount to students and faculty at educational institutions. Consider the following series of transactions that occurred during the month of June 2021 with Joseph Sanchez, a student at Lehigh University. Joseph's hard drive crashes and he sends it to FDRS. June 10 June 12 June 13 June 16 June 19 June 20 June 30 After initial evaluation, FDRS e-mails Joseph to let him know that full data recovery will cost $3,000. Joseph informs FDRS that he would like them to recover the data and that he is a student at Lehigh, qualifying him for a 10% educational discount and reducing the cost to him by $300 (= $3,000 10%). FDRS performs the work and claims to be successful in recovering all data. FDRS' payment terms are 2/10, n/30. Cost incurred by FDRS to recover Joseph's data (use account Cost of Goods Sold) was $1,000. When Joseph receives the hard drive, he notices that FDRS did not successfully recover all data. Approximately 30% of the data had not been recovered and he informs FDRS. FDRS confirms the claim and reduces the amount Joseph owes by 30%. Joseph pays the amount owed to FDRS using cash. Note that Sales Returns and Allowances, Sales Discount, and Credit Card Discount are treated as contra-revenue accounts. Required: 1. Record the necessary transactions (s) in the books of FDRS on each date. Assess the impact of each transaction on the accounting equation. 2. Show how net revenues would be presented in the Income Statement of FDRS. 3. Assuming that Joseph paid his bill on June 25th instead using cash. What journal entry FDRS will prepare in its General Journal. Show how net revenues would be presented in the Income Statement of FDRS under this scenario. Compute the annual interest rate implicit in the sales discount (Round to two decimal places). If Joseph's bank charges 15% interest, should he borrow from the bank to take advantage of the sales discount offered by FDRS? Explain your recommendation. 4. Disregarding the assumption made in #3 above. Assuming that Joseph paid his bill on June 30th using his credit card what journal entry FDRS will prepare in its General Journal. The credit card company charges FDRS 5% fee for handling this transaction. 5. Disregarding the assumption in #3 above but not in #4 above, what journal entry FDRS will prepare when it finally receives the cash payment from the credit card company for the credit transaction with Joseph. Show how net revenues would be presented in the Income Statement of FDRS assuming #4 and #5.