Joanne's Dress Shop received an invoice dated July 25 for $1,400, with terms of 2/10, 1/15, n/60. On August 8, Joanne's Dress Shop sent a partial payment of $750. The actual amount that should be credited is:

Question

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The invoice has a discount of 2% if paid within 10 days, or a discount of 1% if paid within 15 days. 
If the invoice is not paid within 15 days, the full amount is due in 60 days.

Since Joanne's Dress Shop paid $750 on August 8, which within the discount period, the discount can be applied to the payment.

Discount for paying within 10 days: $1,400 x 2% = $28 
Discount for paying within 15 days: $1,400 x 1% = $14

The payment of $750 is larger than the amount eligible for the 2% discount ($1,400 x 2% = $28), so the discount applied will only be 1% ($750 x 1% = $7.50).

Subtracting the payment and the discount from the original invoice amount: 
$1,400 - $750 - $7.50 = $642.50

The actual amount that should be credited is $757.58 (the payment of $750 minus the discount of $7.50 plus the remaining balance of $642.50).

Joanne's Dress Shop Received an Invoice Dated July 25 for $1,400