John Deere Tools is an American company that makes tools for agricultural machinery. During 2024, its 1st year of operations, John Deere Tools recorded sales of $22,300,000 and had returns of $1,530,000. The returns are accounted for when they occur, with additional estimated returns accrued at the end of the period. The cost of goods sold of John Deere Tools totaled $13,380,000 ( 60% of sales). John Deere Tools estimates that 8% of all sales will be returned. The year-end adjusting journal entry to account for anticipated sales returns for John Deere Tools would include: Mutiple Choice Credit to refund liability of $254,000. Debit to sales returns of $1,784,000. Credit to sales returns of $254,000. Debit to cost of sales of $1,784,000