Sue’s Jewelry sold 30 necklaces for $25 each to a credit customer. The invoice included a 6% sales tax and payment terms of 2/10, n/30. Five necklaces were returned prior to payment. The entry to record the return would include a
A. debit to Sales Returns and Allowances for $132.50.
B. debit to Sales Returns and Allowances for $125.00.
C. credit to Sales Tax Payable for $7.50.
D. debit to Accounts Receivable for $132.50.

Question

Sue’s Jewelry sold 30 necklaces for $25 each to a credit customer. The invoice included a 6% sales tax and payment terms of 2/10, n/30. Five necklaces were returned prior to payment. The entry to record the return would include a
  A. debit to Sales Returns and Allowances for $132.50. 	
  B. debit to Sales Returns and Allowances for $125.00. 	
  C. credit to Sales Tax Payable for $7.50. 	
  D. debit to Accounts Receivable for $132.50.