On April 1, a hardware retailer purchases inventory on account for

$ 1 comma 500$1,500.

Which of the following correctly describes the effect of this transaction? Assume a perpetual inventory system is used.

A.Merchandise Inventory increases by

$ 1 comma 500$1,500

and Accounts Payable decreases by

$ 1 comma 500$1,500.

B.Merchandise Inventory decreases by

$ 1 comma 500$1,500

and Accounts Receivable increases by

$ 1 comma 500$1,500.

C.Merchandise Inventory increases by

$ 1 comma 500$1,500

and Accounts Payable increases by

$ 1 comma 500$1,500.

D.Merchandise Inventory decreases by

$ 1 comma 500$1,500

and Accounts Receivable decreases by

$ 1 comma 500$1,500.