During 2021, its first year of operations, Hollis Industries recorded sales of $11,400,000 and experienced returns of $670,000. Cost of goods sold totaled $8,550,000 (75% of sales). The company estimates that 7% 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.