The Track Shack, a recording studio in Jackson, Mississippi recently ordered $8,750 worth of digital storage media to keep in their warehouse. These media devices (thumb drives, CD's, etc.) will be given to clients/recording artists to hold demo songs, etc. after post production services have been applied to their talents. When delivered the shipment included the printed invoice from MS&C Inc. noting the terms 3/10,n/30.

What would the journal entry look like record the inventory purchase when ordered/delivered if the Track Shack uses the perpetual inventory method?

Item	Accounts/Descriptions	Post Ref	DEBIT	CREDIT
1	Merchandise Inventory		$8,487.50
	Accounts Payable			$8,487.50
2	Merchandise Inventory		$8,750.00
	Accounts Payable			$8,750.00
3	Accounts Payable		$8,750.00
	Merchandise Inventory			$262.50
	Cash			$8,487.50
4	Accounts Payable		$8,487.50
	Cash			$8,487.50

	A.	Item # 2 is the correct journal entry
	B.	Item # 4 is the correct journal entry
	C.	Item # 3 is the correct journal entry
	D.	Item # 1 is the correct journal entry