In July 10, 2020, Monty Ltd. sold $1.3 million of compressors to retailers on account. Monty had paid $949,000 for these compressors. Monty grants the right to return compressors that do not sell in three months following delivery. Past experience indicates that the normal return rate is 16%. By October 11, 2020, retailers returned compressors to Monty and were granted a cash refund totalling $199,000. Monty uses a perpetual inventory system and follows IFRS.

a. Prepare Montys journal entries to record the sale on July 10, 2020.

b. Prepare Montys journal entries to record $199,000 of returns on October 11, 2020.