A company purchased $$1,800$ of merchandise on July $5$ with terms $\frac{2}{10},\frac{n}{30}.$ On July $7,$ it returned $$200$ worth of merchandise. On July $28,$ it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, The correct journal entry to record the purchase on July $5$ is:

Debit Merchandise Inventory $$1,600$; credit Cash $$1,600.$

Debit Accounts Payable $$1,800$; credit Purchase Returns $$200$; credit Merchandise Inventory $$1,600.$

Debit Merchandise Inventory $$1,800$; credit Accounts Payable $$1,800.$

Debit Merchandise Inventory $$1,800$; credit Sales Returns $$200$; credit Cash $$1,600.$

Debit Accounts Payable $$1,800$; credit Merchandise Inventory $$1,800.$