On July 1, 2021, Ayayai Inc. entered into a contract to deliver one of its specialty machines to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $4,900 in advance on July 15, 2021. Kickapoo pays Ayayai on July 15, 2021, and Ayayai delivers the machine (with cost of $2,050) on July 31, 2021.

Instructions

a. Prepare the journal entry on July 1, 2021, for Ellsbury.

b. Prepare the journal entry on July 15, 2021, for Ellsbury.

c. Prepare the journal entry on July 31, 2021, for Ellsbury.

Question

Business

Pumpkin

25 December, 06:54

On July 1, 2021, Ayayai Inc. entered into a contract to deliver one of its specialty machines to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $4,900 in advance on July 15, 2021. Kickapoo pays Ayayai on July 15, 2021, and Ayayai delivers the machine (with cost of $2,050) on July 31, 2021.

Instructions

a. Prepare the journal entry on July 1, 2021, for Ellsbury.

b. Prepare the journal entry on July 15, 2021, for Ellsbury.

c. Prepare the journal entry on July 31, 2021, for Ellsbury.

+4

Answers (1)

Know the Answer?

Tyree Lara · Answer 1

Journal entries

Explanation:

The Journal entry is shown below:-

July 1 No Entry is required

July 15

Cash Dr, $4,900

To Unearned Sales Revenue $4,900

(Being cash is recorded)

July 31

Unearned Sales Revenue Dr, $4,900

To Sales Revenue $4,900

(Being unearned sales revenue is recorded)

Cost of Goods Sold Dr, $2,050

To Inventory $2,050

(Being cost of goods sold is recorded)