A company using the perpetual inventory system purchased inventory worth $550,000 on account with credit terms of 2/15, n/45. Defective inventory of $70,000 was returned 3 days later, and the accounts were appropriately adjusted
If the company paid the invoice 25 days later, the journal entry to record the payment would be ________.
A) $550,000 debit to Accounts Payable and $550,000 credit to Cash
B) $480,000 debit to Accounts Payable and $480,000 credit to Cash
C) $550,000 debit to Accounts Payable, $540,400 credit to Cash, and $9,600 credit to Merchandise Inventory
D) $540,400 debit to Accounts Payable, $9,600 credit to Merchandise Inventory, and $480,000 credit to Cash