Argyle Corp. uses the gross method or recording sales discounts. Assume that Fitzgerald, Inc. made a $12,000 purchase with terms of 2/10, n/30. When it pays in the discount period, what is the correct journal entry?

Gross Method

An accounting method for recording purchases at the invoice price without deducting any cash discounts offered.

Sales Discounts

A reduction in the price of goods or services offered to customers to encourage prompt payment.

Discount Period

The time frame in which a payment can be made with a discount for early payment, often used in terms of sales and accounts receivable to encourage prompt payment.