Homework SourseOn July 1 2018 Ellsbury Inc entered into a contract to deliv
On July 1, 2018, Ellsbury Inc. entered into a contract to deliver one of its specialty machines to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $3,000 in advance on July 15, 2018. Kickapoo pays Ellsbury on July 15, 2018, and Ellsbury delivers the machine (with cost of $1,900) on July 31, 2018. (a) Prepare the journal entry on July 1, 2018, for Ellsbury. (b) Prepare the journal entry on July 15, 2018, for Ellsbury. (c) Prepare the journal entry on July 31, 2018, for Ellsbury.
Solution
SOLUTION
* Neither party performed on July 1, 2018
| Date | Account titles and Explanation | Debit ($) | Credit ($) |
| July 1, 2018 | No entry* | ||
| July 15, 2018 | Cash | 3,000 | |
| Unearned Sales Revenue | 3,000 | ||
| July 31, 2018 | Unearned Sales Revenue | 3,000 | |
| Sales Revenue | 3,000 | ||
| Cost of Goods Sold | 1,900 | ||
| Inventory | 1,900 |
