A company that uses the net method of recording purchases made a purchase of $1,900 with terms of 2/10, n/30. The entry to record the purchase would be:

Debit Accounts Payable $1,900; credit Discounts Lost $38; credit Cash $1,862.

Debit Merchandise Inventory $1,862; credit Accounts Payable $1,862.

Debit Merchandise Inventory $1,900; credit Discounts Lost $38; credit Accounts Payable $1,862.

Debit Merchandise Inventory $1,862; credit Cash for $1,862.

Debit Merchandise Inventory $1,862; debit Discounts Lost $38; credit Accounts Payable $1,900.