During 2019, Gleeson Technologies Sold Merchandise for a Total of $800,000

During 2019, Gleeson Technologies sold merchandise for a total of $800,000. The cost of merchandise to Gleeson was $560,000. Gleeson allows a 60 day return period for the merchandise it sells. At year-end, Gleeson estimates there are $90,000 of sales (with a cost of $63,000 to Gleeson) that are still within the 60-day return period. From past experience, Gleeson believes that 5% of this merchandise will be returned. Assume Gleeson's fiscal year is December 31.
Gleeson's adjusting journal entries will include:

A) A debit to Estimated Inventory Return for $4,500
B) A credit to Cost of Goods Sold for $3,150
C) A debit to Sales Refunds Payable for $4,500
D) A debit to Sales Returns and Allowances for $3,150
E) No adjusting journal entry is required. Return will be recognized when it occurs.