A retail store purchased $4,000 worth of product from a supplier. However, 30% of the product was defective and returned. What journal entry should be made by the retail store to record the purchase returns? Assume the retail store uses the periodic inventory system.

Select one:

a. Debit Accounts Payable $1,200, Credit Cash $800, Credit Purchase Returns and Allowances $400

b. Debit Accounts Payable $1,200, Credit Purchase Returns and Allowances $1,200

c. Debit Accounts Payable $1,200, Credit Merchandise Inventory $1,200

d. Debit Accounts Payable $1,200, Credit Cash $200, Credit Cost of Goods Sold $1,000