Revenue Recognition Standard-Adjusting Journal Entries TheOne sold $5,000,000 of merchandise on account during the current year. The cost for this merchandise to TheOne was $1,400,000. To encourage early payment from its customers TheOne offers credit terms of 2/10, n/30. At year-end. TheOne recognizes that there are $500,000 of sales on account still eligible for the 2 percent discount. TheOne believes that all customers will pay within the discount period to receive this discount. In addition, TheOne allows a 60-day return privilege for the merchandise it sells. At year-end, TheOne estimates there remain $600,000 of sales (with a cost to TheOne of $168,000) that are still within the 60-day return period and that, based on past experience, 4 percent of this merchandise is expected to be returned Prepare the period end adjusting journal entries needed for The One to comply with the new revenue recognition standard. Assume TheOne's fiscal year-end is December 31. General Journal Description Alowance for sales discounts Allowance for sales discounts To record estimated sales discounts Sales returns and allowances Sales refunds payable Debit Credit 2 0x 0 0~ 0x 0 To record estimated retum of sales still eligible for return Estimated inventory return Cost of goods sold To record the cost of merchandise sold for sales still elgble for return