A company purchased $1.800 of merchandise on July 5 with terms 2/10, 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 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 Debit Accounts Payable $1.800, credit Purchase Returns $200, credit Merchandise Inventory $1,600