On March 12, Klein Company Sold Merchandise in the Amount $$\begin{array} { | l | r | r | } \hline \text { Cash } & 7,056 & \\\hline \text { Accounts receivable } & & 7,056 \\\hline\end{array}$$

On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales.
- On March 15, Babson returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $350. Babson pays the invoice on March 20, and takes the appropriate discount. The journal entry that Klein makes on March 20 is:

A) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 7,056 & \\\hline \text { Accounts receivable } & & 7,056 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 7,800 & \\\hline \text { Accounts receivable } & & 7,800 \\\hline\end{array}$$
C) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 7,644 & \\\hline \text { Sales discounts } & 156 & \\\hline \text { Accounts receivable } & & 7,800 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 4,500 & \\\hline \text { Accounts receivable } & & 4,500 \\\hline\end{array}$$
E) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 7,056 & \\\hline \text { Sales discounts } & 144 & \\\hline \text { Accounts receivable } & & 7,200 \\\hline\end{array}$$