Newgen Company purchased merchandise on account from a supplier for $9,000, terms 2/10, n/30. Newgen Company returned $1,200 of the merchandise before payment was made and received full credit.
a. If Newgen Company pays the invoice within the discount period, what is the amount of cash required for the payment?
b. Under a perpetual inventory system, what account is decreased by Newgen Company to record the return?