On July 1, Peterson Company sold merchandise in the amount of $5,800 to Wilson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Peterson uses the perpetual inventory system and the gross method. On July 5, Wilson returns some of the merchandise, which is not defective. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Peterson must make on July 5 is: Multiple Choice 500 Sales returns and allowances Accounts receivable 500 500 Accounts receivable Sales returns and allowances 500 500 500 Accounts receivable Sales returns and allowances cost of goods sold Merchandise inventory 350 350 500 5001 Sales returns and allowances Accounts receivable Merchandise inventory Cost of goods sold 350 350 350 Sales returns and allowances Accounts receivable 350