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.When the entry relating to this transaction is recorded,that entry will reduce:

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The payment was made within the discount period, so a 2% discount is applied. The discount amount is $200 ($10,000 x 2%). This reduces the cost of inventory, as the company records the inventory at the discounted price.