On December 10, Year 1, Cantlay Inc. made $500,000 in sales on account to various customers. The cost of the merchandise sold is $350,000. Cantlay estimates that 4% of the merchandise will be returned. Cantlay allows customers to return merchandise for a credit or refund within 30 days of purchase. On December 20, Cantlay gave $16,000 credit to various customers related to the return of merchandise. Assume that Cantlay uses a perpetual inventory system. Required: Question Content Area 1. Prepare the journal entries to record the sale on December 10, the return of merchandise on December 20, and any adjusting entry necessary on December 31. Year 1 Dec. 10 Accounts Receivable Accounts Receivable 500,000 Sales Revenue