On July 10, 2014, Amodt Music sold CDs
On July 10, 2014, Amodt Music sold CDs to retailers on accountand recorded sales revenue of $721,250 (cost $577,000). Amodtgrants the right to return CDs that do not sell in 3 monthsfollowing delivery. Past experience indicates that the normalreturn rate is 15%. By October 11, 2014, retailers returned CDs toAmodt and were granted credit of $75,000. Prepare Amodt’s journalentries to record (a) the sale on July 10, 2014, and (b) $75,000 ofreturns on October 11, 2014.
