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[The following information applies to the questions displayed below.] Hogan Company uses the net method of accounting for sales discounts. Hogan offers trade discounts to various groups of buyers. On August 1, 2021, Hogan factored some accounts receivable on a without recourse basis. Hogan incurred a finance charge. Hogan also has some notes receivable bearing an appropriate rate of interest. The principal and total interest are due at maturity. The notes were received on October 1, 2021, and mature on September 30, 2022. Hogans operating cycle is less than one year.

Required:

1a. Using the net method, do sales discounts affect the amount recorded as sales revenue and accounts receivable at the time of sale? YES/NO? 1b. Using the net method, is there an effect on Hogans sales revenues and net income when customers do not take the sales discounts? YES/NO? 2. Do trade discounts affect the amount recorded as sales revenue and accounts receivable? YES/NO 3. Should Hogan decrease accounts receivable to account for the receivables factored on August 1, 2021? YES/NO 4. Hogan should report the face amount of the interest-bearing notes receivable and the related interest receivable for the period from October 1 through December 31 on its balance sheet as: CURRENT ASSETS/ NON-CURRENT ASSETS?

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