Installment sales-default and repossession

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Reference no: EM13765289

(Installment Sales-Default and Repossession)

Green Acres Ltd. was involved in two default and repossession cases during the year:

1. A home theatre system was sold to Jonathan Quick for $2,400, including a 40% markup on selling price. Quick made a down payment of 10% plus four of the remaining 24 equal payments of $90, and then defaulted on further payments. The home theatre system was repossessed, at which time the fair value was determined to be $475.

2. A TV that cost $1,500 was sold to Haji Jari for $3,180 on the installment basis. Jari made a down payment of $300 and paid $160 a month for 10 months, after which he defaulted. The TV was repossessed, and the estimated value at time of repossession was determined to be $850.

Instructions

Prepare journal entries to record each of these repossessions. (Ignore interest charges.)

Reference no: EM13765289

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