3) On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, 1/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. On March 15, Babson returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $350. Babson pays the invoice on March 20, and takes the appropriate discount. The journal entry that Klein makes on March 20 is: A) Cash 7,800 Accounts receivable 7.800 B) Cash 4,500 Accounts receivable 4,500 C) Cash 7,056 Sales discounts 144 Accounts receivable 7,200 D) Cash 7,056 Accounts receivable 7,056 E) Styles Paragraph Cash 4,5001 4.500 7,056 144 Accounts receivable C) Cash Sales discounts Accounts receivable D) Cash Accounts receivable E) 7.200 7,056 7,056 Cash 7,644 156 Sales discounts Accounts receivable 7,800