Prepare the journal entries that xyz record at december

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Reference no: EM133172011

Question - Late in December 2021, XYZ Corp. (XYZ), a publicly traded company, completed the manufacture of 600 air conditioners for L0 Inc. (LO). Each unit retails for $1,200 and has a cost of $620. When advised of the pending shipment of the completed units, LO requested that XYZ hold the product, claiming LO's warehouse was full of merchandise for the holiday season. LO agreed to accept ownership of the product while XYZ held the product, and to reimburse XYZ for any incremental holding costs.

Required -

a) Prepare the journal entries that XYZ should record at December 31, 2021.

b) Identify the type of transaction between L0 and XYZ, and briefly discuss any related conditions.

Reference no: EM133172011

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