A company that uses the net method of recording purchases and a perpetual inventory system purchased $2,300 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $450 worth of merchandise. On July 28, it paid the full amount due. The correct journal entry to record the payment on July 28 is:

• Debit Accounts Payable $2,300; credit Cash $2,300.

• Debit Cash $1,850; credit Accounts Payable $1,850.

• Debit Accounts Payable $1,850; credit Merchandise Inventory $37; credit Cash $1,813.

• Debit Merchandise Inventory $1,850; credit Cash $1,850.

• Debit Accounts Payable $1,813; debit Discounts Lost $37; credit Cash $1,850.