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Yellow High Limited sold $300,000 merchandise inventory to Red Legs Limited on August 14, 2025 on the following credit terms: 3/10, n/25

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Yellow High Limited sold $300,000 merchandise inventory to Red Legs Limited on August 14, 2025 on the following credit terms: 3/10, n/25. On August 18, 2025 the CEO of Red Legs Limited rang complaining that she wanted to return 40% of the merchandise purchased as it was not the color of material wanted. Yellow High Limited agreed Red Legs Limited could return half of the amount they wished to return, and that for the other half Yellow High Limited would need only pay $40,000. On August 22, 2025 Red Legs Limited paid the outstanding balance in full. What is the total sales allowance and sales credit did Yellow High Limited record? Select one: a. $20,000 - Sales allowance; $6,000 - Sales discount. b. $80,000 - Sales allowance; $4,200 - Sales discount. c. $40,000 - Sales allowance; $12,000 - Sales discount. d. $120,000 - Sales allowance; $5,400 - Sales discount.