A Company Sold Merchandise for $1,000 on Account with Terms

A company sold merchandise for $1,000 on account with terms of 2/10, n/30. The company uses a perpetual inventory system. Defective merchandise of $200 was returned 2 days later. If the payment was received after 20 days, the journal entry to record the cash receipt will include:

A) a debit to Cash for $980 and a credit to Accounts Receivable for $980.
B) a debit to Cash for $800 and a credit to Accounts Receivable for $800.
C) a credit to Sales for $800 and a debit to Cash for $ 800.
D) a credit to Cost of Goods Sold for $1000 and a debit to Sales for $1,000.

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