Bridgeport Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Bridgeport estimates returns of 15%. Bridgeport sells these seeds on account for $1,390,000 (cost $764,500) on January 2, 2017. Customers are required to pay the full amount due by March 15, 2017.

Prepare the journal entry for Bridgeport at January 2, 2017.

Assume that one customer returns the seeds on March 1, 2017, due to unsatisfactory performance. Prepare the journal entry to record this transaction, assuming this customer purchased $107,000 of seeds from Bridgeport and also record the entry required to pay the full amount due by March 15, 2017.

Assume Bridgeport prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Bridgeports financial results for the above transactions on March 31, 2017, assuming remaining expected returns of $101,500.

Date Account Titles and Explanation Debit Credit Jan. 2, 2017 Accounts Receivable 1,390,000 Sales Revenue 1,390,000 To recognize revenue.) Cost of Goods Sold 764,500 Inventory 764,500