On October 1, Courtland Company sold merchandise in the amount of $5,800 to Carter Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Courtland uses the periodic inventory system. On October 4, Carter returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. Carter pays the invoice on October 8, and takes the appropriate discount. The journal entry that Courtland makes on October 8 is:

Question

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On October 1, Courtland recorded the sale with the following journal entry:
Accounts receivable - Carter Company $5,800
Sales $5,800
Cost of goods sold $4,000
Inventory $4,000

On October 4, when Carter returned some of the merchandise, Courtland recorded the return with the following journal entry:
Sales returns and allowances $500
Inventory $350
Cost of goods sold $350
Accounts receivable - Carter Company $500

On October 8, when Carter paid the invoice, Courtland recorded the receipt of payment with the following journal entry:
Cash ($5,800 - $500 + $110) $5,410
Sales discounts ($5,800 x 2%) $116
Accounts receivable - Carter Company $5,800

On October 1, Courtland Company Sold Merchandise in the Amount