Wildhorse Company is presently testing a number of new agricultural seeds that it has recently harvested. Io stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for $4$ months. Wildhorse sells these seeds on account for $$1,400,000($cost $$700,000)$ on January $2,2025.$ Customers are required to pay the full amount due by April $15,2025.$

$($a$)$

Prepare the journal entry for Wildhorse at January $2,2025,$ assuming Wildhorse estimates returns of $20\%$ based on prior experience. $($List all debit entries befor Acredit entries. 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

Jan. $2,2025$ Credit

$($To recognize revenue.$)$

$($To record cost of goods sold.$)$