Identify the account and amount recorded during a purchase discount or a sales discount.

Paulsen Hardware offered a discount to customers who used the store credit card to purchase lumber. If a customer paid his or her bill in full within 30 days of a lumber purchase, 5% was deducted from the invoice amount, to be used as store credit on the customers next purchase.

A frequent customer of the Paulsen Hardware store, George, bought $25,000 worth of lumber using his store credit card. George paid his balance in full 27 days after making the purchase.

$1,250 would be recorded in the

• a.)

  purchase discount account

• b.)

  purchase account

• c.)

  sales account

• d.)

  sales discount account