Xanadu Company purchased merchandise on account from Springhill Company for $7,900, terms 2/10, n/30. Xanadu returned merchandise with an invoice amount of $2,000 and received full credit. a.  If Xanadu Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar. $fill in the blank 1 b.  What account is debited by Xanadu Company to record the return?

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is