An investor is long 300 shares of CTS stock and short 30 CTS May calls. This position can best be described as A) a credit spread with a limited gain potential. B) a debit spread with no gain potential. C) a ratio spread with an unlimited loss potential. D) a long stock, short call hedge with a limited loss potential.

On june 3, teal company sold to chester company merchandise having a sale price of $2,600 with terms of 2/10, n/60, f. o.b. shipping point. an invoice totaling $91, terms n/30, was received by chester on june 8 from john booth transport service for the freight cost. on june 12, the company received a check for the balance due from chester company. prepare journal entries on the teal company books to record all the events noted above under each of the following bases. (1) sales and receivables are entered at gross selling price. (2) sales and receivables are entered at net of cash discounts.