Holmes Company paid within the discount period for merchandise with a cost of $8,000; the payment terms were 2/10, n/30. The journal entry to record this transaction is debit Cash $7,840; debit Merchandise Inventory $160; credit Accounts Payable $8,000. debit Accounts Payable $8,000; credit Cash $7,840; credit Merchandise Inventory $160. debit Cash $7,840; debit Cost of Goods Sold $160; credit Accounts Payable $8,000. debit Accounts Payable $8,000; credit Cash $7,840; credit Cost of Goods Sold $160