Reference no: EM132172045

Question - A company purchased $3,500 of merchandise on July 5 with terms 3/10, n/30. On July 7, it returned $700 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is:

A. Debit Merchandise Inventory $2,800; credit Cash $2,800

B. Debit Cash $2,800; credit Accounts Payable $2,800.

C. Debit Accounts Payable $2,800; credit Merchandise Inventory $84; credit Cash $2,716.

D. Debit Accounts Payable $3,500; credit Cash $3,500.

E. Debit Accounts Payable $2,800; credit Cash $2,800.