A company that uses the net method of recording purchases and a perpetual inventory system 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. The correct journal entry to record the payment on July 28 is:

• A. Debit Accounts Payable $1,800; credit Cash $1,800.
• B. Debit Accounts Payable $1,568; debit Discounts Lost $32; credit Cash $1,600.
• C. Debit Cash $1,600; credit Accounts Payable $1,600.
• D. Debit Merchandise Inventory $1,600; credit Cash $1,600.
• E. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568.