A Company Uses the Perpetual Inventory System and Recorded the Following

A company uses the perpetual inventory system and recorded the following entry: $\begin{array}{|c|c|c|}\hline \text { Merchandise Inventory } & 2,500 & \\\hline \text { Accounts Payable } & & 2,500 \\\hline\end{array}$ This entry reflects a:

A) Purchase of merchandise on credit.
B) Return of merchandise.
C) Sale of merchandise on credit.
D) Payment of the account payable less a 2% cash discount taken.
E) Payment of the account payable less a 1% cash discount taken.