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On July 10, 2014, Amodt Music sold CDs to retailers on account and recorded sales revenue of $721,250 (cost $577,000). Amodt grants the right to
On July 10, 2014, Amodt Music sold CDs to retailers on account and recorded sales revenue of $721,250 (cost $577,000). Amodt grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2014, retailers returned CDs to Amodt and were granted credit of $75,000. Prepare Amodts journal entries to record (a) the sale on July 10, 2014, and (b) $75,000 of returns on October 11, 2014.
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