The sale and purchase will be recorded at the amount after the trade discount is subtracted. For example, when goods with list prices totaling $1,000 are sold to a wholesale customer entitled to a 30% trade discount, both the seller and the buyer will record the transaction at the net amount of $700.
Trade discounts are different from early-payment discounts. (Early-payment discounts of 1% or 2% are likely to be recorded by the seller as a sales discount and by the buyer using the periodic inventory method as a purchase discount.)
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