On Oct 1, Jerry's Lighting purchased merchandise with a list price of $5,000 with credit terms of 1/10, n/30. On Oct 3, Jerry's returns $500 of the merchandise. Assuming a periodic inventory system is used and Jerry's pays the remaining amount owed on the purchase within the discount period, Jerry's journal entry to record the payment, would include:
A. a debit to Accounts Receivable for $4,500.
B. a credit to Purchase Discounts for $45.
C. a debit to Accounts Payable for $4,500.
D. a debit to Merchandise Inventory for $45.
Answer: C
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