A layaway "sale" is not really a sale because the seller still has custody and legal title to the merchandise; Therefore,revenue from a layaway sale is not recognized until the purchaser pays fully for the merchandise.
Diane is giving her husband Dennis an HD Projection System for Christmas.On November 15th.,Diane puts down a $1,200 deposit toward the full price of $3,200 at TV Depot to place the system on layaway.On December 1st,Diane pays another $1,000,and on December 15th.,she makes the final $1,000 payment and takes the system home to be Christmas wrapped.
TV Depot's cost for the HD system is $2,400.
Required:
Make the necessary journal entries to record this transaction.

Question

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The Answer of A layaway "sale" is not really a sale because the seller still has custody and legal title to the merchandise; Therefore,revenue from a layaway sale is not recognized until the purchaser pays fully for the merchandise.
Diane is giving her husband Dennis an HD Projection System for Christmas.On November 15th.,Diane puts down a $1,200 deposit toward the full price of $3,200 at TV Depot to place the system on layaway.On December 1st,Diane pays another $1,000,and on December 15th.,she makes the final $1,000 payment and takes the system home to be Christmas wrapped.
TV Depot's cost for the HD system is $2,400.
Required:
Make the necessary journal entries to record this transaction.

A Layaway "Sale" Is Not Really a Sale Because the Seller