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Blue Company s$$ld $$106000$ worth of goods on account to Vaughn Inc. on June $20.$ Blue marks all goods up $25\%$ on $$ost$.$ Vaughn has $45$ days to return the goods for any reason. On July $1,$ Vaughn returns $$9275$ worth of goods. Blue expects to be able to resell the returned goods at a profit.

The journal entries for Blue to record the initial sales on June $20$ included debits to

Accounts Receivable for $$106000,$ and Cost of Goods Sold for $$84800.$

Accounts Receivable for $$106000,$ and Sales of $$84800.$

Inventory for $$106000,$ and Cash for $$84800.$

No entry can be made because the items can be returned.

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