Problem 6-5 Pearl Ranch & Farm is a distributor of ranch and farm equipment. Its products include small tools, power equipment for trench-digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company catalogue and Internet site. However, given some of its specialty products, select farm implement stores carry Pearl's products. Pricing and cost information on three of Pearl's most popular products are as follows. Stand-Alone Selling Price (Cost) ($1,840) ($736) (510,120) Item Mini-trencher Power fence hole auger Grain/Hay dryer 3,312 1,104 12,880 Respond to the requirements related to the following independent revenue arrangements for Pearl Ranch & Farm. IFRS is a constraint. On January 1, 2017, Pearl sells augers to Mills Farm & Fleet for $44,160. Mills signs a six-month note at an annual interest rate of 12%. Pearl allows Mills to return any auger that it cannot use within 60 days and receive a full refund. Based on prior experience, Pearl estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Pearl's costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entry for Pearl on January 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit January 1, 2017 To record sales.) January 1, 2017