A company purchased inventory for $4,000 from a vendor on ac

A company purchased inventory for $4,000 from a vendor on account, FOB shipping point, with terms of 3/15, n/30. The company paid $100 cash for freight in. The entry to record payment of invoice within 3 days by the purchaser would include ________

(Assume a perpetual inventory system.)
A) a debit to Accounts Payable for $3,880 and a credit to Cash for $3,880
B) a debit to Accounts Payable for $4,000, a debit to Merchandise Inventory for $100, and a credit to Cash for $3,880
C) a debit to Accounts Payable for $4,000, a credit to Merchandise Inventory for $120, and a credit to Cash for $3,880
D) a debit to Accounts Payable for $3,880, a debit to Merchandise Inventory for $120, and a credit to Cash for $4,000

ANSWER

C