1. Apple Music sold vinyl albums to retailers on account on July 1, 2019. On July 1, Apple recorded sales revenue of $687,456 and cost of goods sold equal to $236,848. The retailers who purchase the albums have the right to return any albums that dont sell within three months. Past experience indicates that the normal rate of return is 12.6%. By October 2, albums were returned, and retailers were granted credit of $76,602.

1. Provide the journal entry to record the sale of CDs on July 1 assuming Apple Music records sales revenue net. (2 points)

2. Provide the journal entry to record the return of merchandise on October 2. (2 points)

3. Provide the adjusting journal entry related to the sales in order to close Apples books on October 31, 2020 (Apples year end). (2 points)