Huntington Inc. sold merchandise to a customer on account for $159,000, terms n/30. The cost of the goods sold was $103,500. The customer returned some of the merchandise a few days later and Huntington issued a credit memo for $25,600 to the customer for the returned merchandise. The customer paid the invoice three weeks later. The cost of the merchandise returned was $19,000.

From Huntington's view, the journal entry to record the merchandise returned would include:

debit to Accounts Receivable for $19,000 debit to Cost of Goods Sold for $19,000 credit to Sales Revenue for $25,600 credit to Accounts Receivable for $25,600