The company received the balance due from Liu Corporation, net of the discount and the allowance.

When a company receives payment from a customer like Liu Corporation, it often applies a discount for early payment or accounts for any allowances for potential returns or damages. This means that the company sees a reduced amount coming in than what was originally invoiced. It's crucial to properly record this transaction in the accounting books to reflect the real income received, ensuring accurate financial reporting. In the real world, companies often utilize these discounts as a strategy to improve cash flow. By incentivizing timely payments, they can reduce the days sales outstanding (DSO), allowing for quicker reinvestment or reduced debt. Monitoring these discounts and allowances is key to financial health and can influence a company’s pricing strategy and relationships with clients.