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On June 1, Steffi Kay sold five sets of Mesherep Peppers to Kaye Earvin for P5,000. Furthermore, Steffi Kay gave out a 20% and 10%

On June 1, Steffi Kay sold five sets of Mesherep Peppers to Kaye Earvin for P5,000. Furthermore, Steffi Kay gave out a 20% and 10% trade discount to Kaye Earvin. Terms: 2/10, 1/20, n/30. FOB Destination, Freight Collect. Freight of P250 was paid by Kaye Earvin on June 3, upon the receipt of goods. On June 7, Kaye Earvin then return P1,500 worth of Mesherep Pepper (list price) to Steffi Kay. It was paid by Kaye Earvin on June 14.
The entry in the books of Steffie Kay on June 7 includes:
a. a credit to accounts receivable for 1,080
b. a debit to accounts receivable for 1,500
c. a debit to accounts receivable for 1,080
d. a credit to purchase returns and allowances for 1,080
The entry in the books of Kaye Earvin on June 14 includes:
a. a credit to purchase discount for 25.20
b. a credit to purchase discount for 50.40
c. a credit to purchase discount for 22.70
d. a credit to purchase discount for 45.40

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