Tyler returned $500 worth of merchandise within the discount period. The entry to record the return would be placed into what account?

The answer to your question is "Debit Accounts Payable/Suppliers Name for $500; credit Purchases Returns and Allowances for $500."

Tyler purchased something on account. I'm using the gross method of recording.

1) Purchases xx

Accounts Payable xx

2) Return of merchandise w/in discount period

Accounts Payable 500

Purchases 500

3) Payment of remaining merchandise w/in discount period

Accounts Payable xx

Cash xx

Purchase discounts xx

Merchandise that can be discounted but returned w/in the discount period should be recorded with its original value.