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Question - On July 1, 2020, Poppy Furniture sold a sofa and loveseat set with a sales tag price of $4,000 on a "no money down, no interest and no payments for two years" promotional deal. The market rate for similar credit arrangements is 12%. The furniture was delivered to the customer the same day, July 1, 2020. Poppy uses a perpetual inventory system and sets their sticker price for this product at a 75% mark-up on cost.
Required - Make entries regarding this transaction necessary in 2020 both at the time of sale AND at year-end. Show your calculations.
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