XYZ received an invoice from T. Henry for 1,000, less a 20% trade discount for inventory. The invoice also included terms which stipulated that a cash discount of 5% would be allowed if the invoice was paid within 10 days. The double entry to record the initial purchase in the books of XYZ is as follows:

• Dr. Purchases 800 Cr. Discount received 200 Cr. T. Henry account 1,000.

• Dr. Purchases 1,000 Cr. T. Henry 1,000.

• Dr. Purchases 750 Cr. T. Henry 750.

• Dr. Purchases 800 Cr. T. Henry 800.