Rebocho Industries purchased $10,000 of merchandise on February 1, 2020 with credit terms of 2/10, n/60. It returned $2,500 worth of merchandise on February 4. Rebocho uses the periodic inventory system and net method for recording purchase discounts. Assume Rebocho paid its invoice on February 9. What is the effect of the entry to record the payment on February 9 on Rebochos assets, liabilities and equity, respectively?

Multiple Choice

• Decrease; Decrease; No effect

• Decrease; No effect; Decrease

• No effect; Increase; Decrease

• Decrease; Decrease; Decrease