A company that uses the net method of recording purchases and a perpetual inventory system purchased $2,100 of merchandise on July 5 with terms 3/10, n/30. On July 7, it returned $300 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 Cash $1,800; credit Accounts Payable $1,800.

Debit Merchandise Inventory $1,800; credit Cash $1,800.

Debit Accounts Payable $1,800; credit Merchandise Inventory $54; credit Cash $1,746.

Debit Accounts Payable $2,100; credit Cash $2,100.

Debit Accounts Payable $1,746; debit Discounts Lost $54; credit Cash $1,800.