Response to the following problem:
Merchandise with an invoice price of 2000 was purchased on October 3 terms 1/15, n/60. The company uses the net method to record purchases.
The entry to record the cash payment of this purchase obligation on October 17 is Accounts payable 1980; cash 1980 Accounts payable 2000; cash 2000 Accounts payable 1980; discounts lost 20; cash 2000 Accounts payable 2000; merchandise inventory 20; cash 1980 Accounts payable 2000; merchandise inventory 40; cash 1960.