Question

BetterBuy uses a perpetual inventory system. BetterBuy sells a computer from inventory for $599 on credit. BetterBuy originally bought the computer from IBM for $395. What journal entry (entries) will BetterBuy prepare to record the sale

Answer 1

1. Accounts receivable Dr. $599

To credit sales $599

2. Cost of goods sold Dr. $395

To credit inventory $395

Step-by-step explanation:

Below is the journal entries:

Accounts receivable Dr. $599

To credit sales $599

Now the second journal entry.

Cost of goods sold Dr. $395

To credit inventory $395

The above journal entries are the sale of a commodity (computer) on credit and the second entry shows the original price of the computer.