On March 5, 2020, Northwest Co. purchased $400,000 in merchandise on account with credit terms of 1/15, n/45. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $7,500. Merchandise with an invoice amount of $5,000 was returned for credit on March 12, 2020. Northwest paid the vendor for the amount owe on March 17, 2020. Assuming Northwest uses a perpetual inventory system and the gross method to record purchases, what journal entry would Northwest record for the payment made on March 17, 2020?

Multiple Choice

• Accounts payable	395,000
  Cash		391,050
  Inventory		3,950

• Accounts payable	396,000
  Cash		396,000

• Accounts payable	395,000
  Purchase discount	3,950
  Cash		398,950

• Accounts payable	400,000
  Cash		396,000
  Purchase discount		4,000