Furtastic manufactures imitation fur garments. On June 1, 2018, Furtastic made a sale to Willett’s Department...
Furtastic manufactures imitation fur garments. On June 1, 2018, Furtastic made a sale to Willett’s Department Store under terms that require Willett to pay $235,000 to Furtastic on June 30, 2018. In a separate transaction on June 15, 2018, Furtastic purchased brand advertising services from Willett for $29,000. The fair value of those advertising services is $13,500. 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.)
Homework Answers
| No. | Date | Account Titles and Explanation | Debit | Credit |
| 1. | June 1, 2018 | Accounts receivables | $235,000 | |
| Sales revenue | $235,000 | |||
| 2. | June 15, 2018 | Advertising expense | $13,500 | |
| Service revenue | $15,500 | |||
| Cash | $29,000 | |||
| 3. | June 30, 2018 | Cash | $235,000 | |
| Accounts receivables | $235,000 |
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