Coronado Ranch & Farm is a distributor of ranch and farm equipment. Its products include small tools, power equipment for trench-digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company Internet site. However, given some of its specialty products, select farm implement stores carry Coronados products. Pricing and cost information on three of Coronados most popular products are as follows.

Item		Stand-Alone Selling Price (Cost)
Mini-trencher		$3,000	($1,720)
Power fence hole auger		1,032	($688)
Grain/hay dryer		12,555	($9,460)

On January 1, 2020, Coronado sells augers to Mills Farm & Fleet for $41,280. Mills signs a six-month note at an annual interest rate of 12%. Coronado allows Mills to return any auger that it cannot use within 60 days and receive a full refund. Based on prior experience, Coronado estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Coronados costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entries for Coronado on January 1, 2020.

Account Title and Explanation	Debit	Credit
January 1, 2020
Notes Receivable (Mills)	$ 41,280.00		Given
Refund Liability (5% * $41,280)		$ 2,064.00	Units Return liability
Sales Revenue		$ 39,216.00	Balance
(To Record the Sales)
Cost of Goods Sold	$ 26,144.00		Balance
Estimated Inventory Returns (40 * $688 * 5%)	$ 1,376.00		Units Return liability
Inventory (40 * $688)		$ 27,520.00
(To Record the Cost of Goods Sold)
* Total sale	$ 41,280.00
Sale price	1032
Units(total sale/sale price)	40

On August 10, 2020, Coronado sells 14 mini-trenchers to a farm co-op in western Canada. Coronado provides a 4% volume discount on the mini-trenchers if the co-op has a 15% increase in purchases from Coronado compared with the prior year. Given the slowdown in the farm economy, sales to the co-op have been flat, and it is highly uncertain that the benchmark will be met. Prepare the journal entries for Coronado on August 10, 2020.

Date	Account Titles and Explanation	Debit	Credit
August 10, 2020	Cash	42,000
	Sales Revenue		42,000
	(To record cash sale)
August 10, 2020	Cost of Goods Sold	24080
	Inventory		24080
	(To record cost of goods sold)

Coronado sells three grain/hay dryers to a local farmer at a total contract price of $39,500. In addition to the dryers, Coronado provides installation, which has a stand-alone sales value of $675 per unit installed. The contract payment also includes a $810 maintenance plan for the dryers for three years after installation. Coronado signs the contract on June 20, 2020, and receives a 20% down payment from the farmer. The dryers are delivered and installed on October 1, 2020, and full payment is made to Coronado. Prepare the journal entries for Coronado in 2020 related to this arrangement as well as any adjusting journal entries at its December year end.

Date	Account Titles and Explanation	Debit	Credit
June 20, 2020 October 1, 2020 December 31, 2020
June 20, 2020 October 1, 2020 December 31, 2020
	(To record sales and installation revenue)
June 20, 2020 October 1, 2020 December 31, 2020
	(To record cost of goods sold)
June 20, 2020October 1, 2020 December 31, 2020