During 2016, its first year of operations, Hollis Industries recorded sales of $11,100,000 and experienced returns of $800,000. Cost of goods sold totaled $6,660,000 (60% of sales). The company estimates that 9% of all sales will be returned.

Prepare the year-end adjusting journal entries to account for anticipated sales returns, assuming that all sales are made on credit and all accounts receivable are outstanding. (If no entry is required for a particular event, select "No journal entry required" in the first account field.)

Requirment 1: Record the anticipated sales returns.

Requirment 2: Record estimated return of inventory.