A company purchased $3,000 of merchandise on July 5 with terms 3/10, n/30. On July 7, it returned $800 worth of merchandise. On July 12, 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 payment on July 12 is:

• Debit Merchandise Inventory $2,200; credit Cash $2,200.

• Debit Accounts Payable $3,000; credit Cash $3,000.

• Debit Accounts Payable $2,200; credit Cash $2,200.

• Debit Accounts Payable $2,200; credit Merchandise Inventory $66; credit Cash $2,134.

• Debit Cash $2,200; credit Accounts Payable $2,200.