Exercise 10-11 Martinez Engineering Corporation purchased conveyor equipment with a list price of $9,400. Presented below are three independent cases related to the equipment. Martinez paid cash for the equipment 8 days after the purchase. The vendor's credit terms are 2/10, n/30. Assume that equipment purchases are initially recorded gross. Martinez traded in equipment with a book value of $2,000 (initial cost $8,600), and paid $10,400 in cash one month after the purchase. The old equipment could have been sold for $500 at the date of trade. (The exchange has commercial substance.) Martinez gave the vendor a $11,200 zero-interest-bearing note for the equipment on the date of purchase. The note was due in one year and was paid on time. Assume that the effective-interest rate in the market was 9%.