Jacob Co. sells merchandise on credit to Isaiah Co. for $9,700. The invoice is dated May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Question

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Amount of discount = Sale price × 1% = $9,700 × 1% = $97
The last day of the discount period = Invoice date of May 1 plus 15 days = May 16

Jacob Co Sells Merchandise on Credit to Isaiah Co