On January 6, a credit sale was made for $1,000. Terms for the sale were 4/10, n/30. Cash for the sale was collected on January 25.

Which debit or credit should be included in the journal entry to record the cash collection on January 25?

1. Debit to sales discounts for $960

2. Debit to sales discounts for $40

3. Debit to accounts receivable for $1000

Debit to cash for $100