Nelson Company bought inventory for $$56,000$ on terms of $2/15,$ n$/60.$ It pays for the first $$42,000$ of inventory purchased within the discount period and pays for the remaining $$14,000$ two months later.

Required:

$1.$ Prepare the journal entries 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? $1$a$.$ Prepare the journal entries to record the purchase of inventory on May $18,$ the partial payment on account on May $28,$ and the payment of the balance on July $17.$ Assume that Nelson uses the gross price method and a periodic inventory system.