On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the net method of accounting for sales. On March 15, Babson returns some of the merchandise, which is not defective. The selling price of the returned merchandise is $600 and the cost of the merchandise returned is $350. The entry(ies) that Klein must make on March 15 is (are):

1

Sales returns and allowances	588
Accounts receivable		588
Merchandise inventory	350
Cost of goods sold		350

2

Sales returns and allowances	588
Accounts receivable		588
Merchandise inventory	343
Cost of goods sold		343

3

Accounts receivable	600
Sales returns and allowances		600

4

Accounts receivable	600
Sales returns and allowances		600
Cost of Goods Sold	350
Merchandise inventory		350

5

Sales returns and allowances	350
Accounts receivable		350