ABC Company purchased a shipment of hockey sticks from Gretzky Co. on January 2nd, 2021. The invoice terms were as follows: $5,000, 3/10, n/30, FOB Shipping. On January 5th, 2021, freight of $300 was paid in cash. ABC Company uses a periodic inventory system. Gretzky Co. utilizes a perpetual inventory system. If the invoice is paid off on January 8th, 2021, what entry is required for Gretzky Co?

Select one:

a. Debit Cash $5,000, Credit Accounts Receivable $5,000.

b. Debit Cash $4,850, Debit Sales Discounts $150, Credit Accounts Receivable $5000.

c. Debit Accounts Payable $5,000, Credit Inventory $150, Credit Cash $4,850.

d. Debit Cash $4,850, Debit Sales Returns & Allowances $150, Credit Accounts Receivable $5000