Elena Co. uses a perpetual inventory system. The company sells merchandise inventory to Holla Inc. on June 8 for 37,500 on credit, 2/10, n/30, F.O.B. destination. The cost of the merchandise inventory was 23,500. On June 14 Holla Inc. returned 7,500 of the merchandise inventory because it was the wrong model. The returned merchandise had a cost of 4,700. What is the appropriate entry Elena Co. records for the return? a) Dr. sales returns & allowances 7,500 and Cr. A/R 7,500 AND Dr. Merchandise Inventory 4,700 and Cr. cost of sales 4,700 Dr. sales returns & allowances 7,500 and Cr. A/R 7,500 AND Dr. cost of sales 4,700 and Cr. Merchandise Inventory 4,700 Dr. A/R 7,500 and Cr. sales returns & allowances 7,500 AND Dr. Merchandise Inventory 4,700 and Cr. cost of sales 4,700 d) Dr. sales returns & allowances 4,700 and Cr. A/R 4,700 AND Dr. Merchandise Inventory 4,700 and Cr. cost of sales 4,700 e) Dr. sales returns & allowances 7,500 and Cr. A/R 7,500 AND Dr. Merchandise Inventory 7,500 and Cr. cost of sales 7,500