Instructions Eastman Corporation sells merchandise with a list price of $13,000 on February 1, with terms of 1/10, n/30. On February 10, payment was received on merchandise originally billed for $7,500, and the balance due was received on March 1. 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 method-recording accounts receivable at the gross price or net priceis theoretically superior? Why? General Journal Shaded cells have feedback. Prepare the journal entries to record the transactions assuming that Eastman records accounts receivable and sales at the gross price. How does grading work? PAGE 10 GENERAL JOURNAL Score: 88/88 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Feb. 1 Accounts Receivable 13,000.00 Sales Revenue 13,000.00 Feb. 10 Cash 7,425.00 75.00 Sales Revenue Accounts Receivable 7,500.00 Mar. 1 Cash 5,500.00 Accounts Receivable 5,500.00 Points: 17/17 Prepare the journal entries to record the transactions assuming that Eastman records accounts receivable and sales at the net price. How does grading work? PAGE 10 GENERAL JOURNAL Score: 88/88 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Feb. 1 Accounts Receivable 12,870.00 12,870.00 Sales Revenue Cash Feb. 10 7,425.00 Accounts Receivable 7,425.00 Mar. 1 Cash 5,500.00 Sales Revenue 55.00 Accounts Receivable 5,445.00 Points: 17/17 Next Level Shaded cells have feedback. What implied annual interest rate is Eastman's customer incurring by failing to take the cash (sales) discount? (Assume a 365-day year.) Additional Information With a discount rate of 1% and assuming a 365-day year, Eastman's customer is incurring an annual interest rate of 36% Points: 071