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Exercise $4-9($Algo$)$ Recording sales, purchases, and cash discounts$-$buyer and seller LO P$1,$ P$2$

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Santa Fe Retailing purchased merchandise from Mesa Wholesalers with credit terms of $\frac{2}{10},\frac{n}{60}$ and an invoice price of $$27,700.$ The merchandise had cost Mesa $$18,891.$ Assume that both buyer and seller use a perpetual inventory system and the gross method.

$00$:$07$:$29$

Prepare entries that the buyer records for the $($a$)$ purchase, $($b$)$ cash payment within the discount period, and $($c$)$ cash payment after the discount period.

Prepare entries that the seller records for the $($a$)$ sale, $($b$)$ cash collection within the discount period, and $($c$)$ cash collection after the discount period.

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