Sagan Company Uses the Perpetual Inventory Method

Multiple Choice

Sagan Company uses the perpetual inventory method.On October 6,Sagan sold merchandise to Parley Co.for $20,000 under credit terms of 2/10,n/60.On October 9,Parley returned $5,000 of that merchandise.On October 15,Sagan received balance due from Parley Co.How would Sagan record this transaction?

A) Debit Cash for $20,000 and credit Accounts Receivable for $20,000.
B) Debit Cash for $15,000 and credit Accounts Receivable for $15,000.
C) Debit Cash for $14,700,debit Sales Discounts for $300,and credit Accounts Receivable for $15,000.
D) Debit Cash for $14,700,debit Sales Discounts for $300,and credit Sales for $15,000.
E) Debit Cash for $15,000,credit Sales Discounts for $300,and credit Accounts Receivable for $14,700