The ACCT 201 Co. sold merchandise for cash to X Co. for $2,000, free on board shipping point. The original price for the merchandise was $2,500; however, ACCT 201 granted X Co. a TRADE discount of $500. The cost of the merchandise sold was $1,500. The company uses the NET method to record SALES discounts and a perpetual inventory system. Which of the following entry correctly records the cash sale for ACCT 201 Co.?

A. Dr. Accounts Receivable $2,500; Cr. Cash $2,500

B. Dr. Cash $2,500; Cr. Accounts Receivable $2,000; Cr. Trade Discounts $500

Dr. Cost of merchandise sold $1,500; Cr. Merchandise inventory $1,500

C. Dr. Cash $2,000; Dr. Trade Discounts $500; Cr. Sales $2,500

D. Dr. Cash $2,000; Cr. Sales 2,000

Dr. Cost of merchandise sold $1,500; Cr. Merchandise inventory $1,500

E. None of the above entries are correct.