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Describe required journal entries for gelly sales

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Question: On December 1, 2018, Gelly Sales sold machinery to Kath Ltd. for $2,000. Kath could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9-month note at 12% interest. Gelly accrues interest only at year-end. On September 1, 2019 Gelly collected the whole amount due from Kath Ltd.

Provide all of the required journal entries for Gelly Sales for 2018 and 2019, and, for Kath Ltd. the 2018 required journal entries, assuming a one-year useful life and $200 estimated residual value for the equipment.

Reference no: EM132745670

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