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Headland Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant
Headland Company is presently testing a number of new agricultural seed planters that it has recently developed. 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. Headland estimates returns of 15%. Headland sells these planters on account for $1,390,000 (cost $764,500) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020. (a) Prepare the journal entry for Headland at January 2, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Date Jan. 2, 2020 (To recognize revenue.) (To record cost of goods sold.)
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