Andy Store sold merchandise in the amount of $5,800 to a customer on October 1, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Andy uses the perpetual inventory system. The journal entries that Andy will make on October 1 will include:
A) Debit to Accounts Receivable for $4,000
B) Credit to Merchandise Inventory for $5,800
C) Debit to Cost of Goods Sold for $5,800
D) Credit to Merchandise Inventory for $4,000
E) Credit to Net Income for $1,800
Ans: D) Credit to Merchandise Inventory for $4,000
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