Juniper Co uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9750 of merchandise on August 7 with terms 1/10,n/30. On August 11, it returned $1500 worth of merchandise. On August 26 it paid the full amount due. The correct journal entry to record the merchandise return on August 11 is:.
A) Debit Merchandise Inventory $1500; Credit Sales Returns $1500 (chosen answer)
B) Debit Accounts Payable $1500; Credit Purchase Returns $1500
C) Debit Accounts Payable $1500; Credit Cash $1500
D) Debit Accounts Payable $1500; Credit Merchandise Inventory $1500
E) Debit Merchandise Inventory $1500; Credit Cash $1500