A company using the perpetual inventory system purchased inventory worth $20,000 on account with credit terms of 1/10,n/30. Defective inventory was received, but instead of a return, an allowance of $1,200 is given. The allowance is granted before the invoice is paid. The journal entry to record the allowance would be A. $1,200 debit to Merchandise Inventory and $1,200 credit to Accounts Payable B. $1,188 debit to Accounts Payable and $1,188 credit to Merchandise Inventory C. $1,200 debit to Accounts Payable and $1,200 credit to Merchandise Inventory D. $1,188 debit to Merchandise Inventory and $1,188 credit to Accounts Payable