Question

Recall that the original sale on August 5th was for $3,800 but because of the $800 return on August 10th, the balance owing was reduced to $3,000. So cash is debited for $2,940 which is the total $3,000 LESS the $60 discount.

Answer 1

The question involves business concepts of cash transactions, returns, discounts, and equity in real estate, highlighting essential accounting procedures and the importance of understanding equity gains in property investment.

Step-by-step explanation:

The subject relates to financial transactions involving cash sales, returns, discounts, and the calculation of equity in real estate. These are fundamental concepts in business and accounting practice, where terms like debits and credits play a crucial role in recording transactions. Additionally, understanding the equity in an asset, such as a house, is essential for financial decision-making.

For example, Freda's purchase and hypothetical sale of a house demonstrate a significant increase in market value, resulting in a substantial equity gain, which is the difference between the market value of the house and what is owed to the bank. Similarly, Ben's down payment and subsequent loan payments have resulted in increased equity due to the property's appreciation in value.

These scenarios highlight important business principles relevant to real estate investments and personal finance management, which would be taught at the college level under a business curriculum.