Martinez Publishing Co. publishes college textbooks that aresold to bookstores on the following terms. Each title has a fixedwholesale price, terms f.o.b. shipping point, and payment is due 60days after shipment. The retailer may return a maximum of 30% of anorder at the retailer’s expense. Sales are made only to retailerswho have good credit ratings. Past experience indicates that thenormal return rate is 12%. The costs of recovery are expected to beimmaterial, and the textbooks are expected to be resold at aprofit. On July 1, 2017, Martinez shipped books invoiced at$13,800,000 (cost $11,040,000). Prepare the journal entry to recordthis transaction. (Credit account titles are automatically indentedwhen amount is entered. Do not indent manually.If no entry isrequired, select "No entry" for the account titles and enter 0 forthe amounts.) Account Titles and Explanation Debit Credit (Torecognize revenue.) (To record cost of goods sold.) On October 3,2017, $1,380,000 of the invoiced July sales were returned accordingto the return policy, and the remaining $12,420,000 was paid.Prepare the journal entries for the return and payment. (Creditaccount titles are automatically indented when 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 AccountTitles and Explanation Debit Credit Oct. 3, 2017 (To record thereturn) (To record cost of goods returned) (To record the payment)Assume Martinez prepares financial statements on October 31, 2017,the close of the fiscal year. No other returns are anticipated.Indicate the amounts reported on the income statement and balancerelated to the above transactions. (If answer is 0, please enter 0.Do not leave any fields blank.) Income Statement (partial) $ : $Balance Sheet (partial) $