Instructions Nelson Company bought inventory for $56.000 on terms of 2/15, 1/60. It pays for the first $42,000 of inventory purchased within the discount period and pays for the remaining S14,000 two months later. 1. Prepare the journal entnes to record the purchase and the payment under both the (a) gross price and (b) net price methods Assume that Nelson uses the periodic inventory system 2. Next Level Which of the two methods yields a conceptually preferable valuation of inventory? Chart of Accounts CHART OF ACCOUNTS Nelson Company General Ledger ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable 131 Inventory 142 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 241 Accrued Loss on Purchase Commitment 251 Unearned Revenue 261 Income Taxes Payable EXPENSES 500 Cost of Goods Sold 510 Purchases 511 Purchase Returns and Allowances 512 Purchase Discounts Taken 513 Purchase Discounts Lost 514 Loss on Purchase Commitment 515 Recovery of Accrued Loss on Purchase Commitment 521 Salaries Expense 525 Interest Expense 532 Bad debt Expense 534 Insurance Expense 536 Utilities Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings