On October $2,2025,$ Sunland Company sold $$6,350$ of its elite camping gear $($with a cost of $$3,670)$ to Novak Outfitters. As part of the sales agreement, Sunland includes a provision that if Novak is dissatisfied with the product, Sunland will grant an allowance on the sales price or agree to take the product back $($although returns are rare, given the long$-$term relationship between Sunland and Novak$).$

Novak expects total allowances to Novak to be $$770.$ On October $16,2025,$ Sunland grants an allowance of $$390$ to Novak because the color for some of the items delivered was a bit different than what appeared in the catalog.

Prepare journal entries for Sunland to record $(1)$ the sale on October $2,2025,(2)$ the granting of the allowance on October $16,2025,$ and, $(3)$ any adjusting required on October $31,2025($when Sunland prepares financial statements$).$ Sunland now estimates additional allowances of $$240$ will be granted to Novak in the future.