Question

On November 1, 2021, Green Valley Farm entered into a contract to buy a $150,000 harvester from JohnDeere. The contract required Green Valley Farm to pay $150,000 in advance on November 1, 2021. Theharvester (cost of $110,000) was delivered on November 30, 2021. The journal entry to record thecontract on November 1, 2021 includes a

Answer 1

Journal Entry

Step-by-step explanation:

The Journal Entry is shown below:-

Cash Dr, $150,000

To Unearned sales revenue $150,000

(Being receipt of cash in advance is recorded)

Therefore to record the inflow funds we debited cash and to record the liability/obligation to deliver such goods we credited unearned sales revenue.