Purple Corp.purchased $10,000 of merchandise on June 3,subject to the terms,2/10,n/30.On June 9,it pays for all the merchandise purchased on June 3.The entry on June 9 will reduce:

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Since payment was made within the discount period,the related entry will decrease Accounts Payable,a liability account,by $10,000 (the entire amount owed),decrease Cash,an asset account,by $9,800 [or ($10,000 − ($10,000 × 0.02)],and decrease Inventory,an asset account,by $200 (or $10,000 × 0.02).Since revenues and expenses are not included in this entry,there is no effect on net income or stockholders' equity.