An item of merchandise was purchased for $600 with credit terms of 2/10, n/30. The vendor was paid within the discount period. Assuming that a perpetual inventory system is in use, which of the following is the correct journal entry to record the payment of the related invoice on the buyer's books?

Debit Purchases $600; credit Cash $600.

Debit Cash $588; debit Sales Discounts $12; credit Accounts Receivable $588.

Debit Accounts Payable $600; credit Inventory $12; credit Cash $588.

Debit Inventory $588; credit Cash $588.

Debit Accounts Payable $600; credit Purchases Discount $12; credit Cash $588.