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Furtastic manufactures imitation fur garments. On June 1, 2016, Furtastic made a sale to Willett’s Department Store under terms that require Willett to pay $150,000 to Furtastic on June 30, 2016. In a...

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Furtastic manufactures imitation fur garments. On June 1, 2016, Furtastic made a sale to Willett’s Department Store under terms that require Willett to pay $150,000 to Furtastic on June 30, 2016. In a separate transaction on June 15, 2016, Furtastic purchased brand advertising services from Willett for $12,000. The fair value of those advertising services is $5,000. Furtastic expects that 3% of all sales will prove uncollectible.

Required:
1. to 3.

Prepare the journal entries to record the transactions above.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answered Same Day Dec 25, 2021

Solution

David answered on Dec 25 2021
115 Votes
SOLUTION
1 DR Accounts Receivable $150,000
CR Sales Revenue $150,000
2 DR Advertising expense $5,000
DR Expense in excess of fair value $7,000
CR Cash $12,000
3 DR Cash $150,000
CR Accounts receivable $150,000
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SOLUTION.PDF

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