Kingbird-Air is selling a new model of high-efficiency air conditioner. To stimulate interest, Kingbird-Air is granting certain large customers the unconditional right to return these air conditioners if not fully satisfied. The right of return extends for six months. Kingbird-Air estimates returns of 9%. Kingbird-Air sells these air conditioners on account for $18,800,000 (cost $11,280,000) on April 2, 2017. Customers are required to pay the full amount due by June 15, 2017.

(a) Prepare the journal entry for Kingbird-Air on April 2, 2017. Use the net method to record sales.

(b) Assume that on May 15, 2017 one customer returns air conditioners that it purchased from Kingbird-Air for $406,000. Prepare the journal entry to record this transaction and the receipt of cash from customers on June 15, 2017.

(c) Assume Kingbird-Air prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Kingbird-Airs financial results for the above transactions on June 30, 2017, assuming remaining expected returns of $1,210,000.