(Installment Sales—Default and Repossession) Kurt Angle Company uses the installmentsales method in accounting for its installment sales. On January 1, 2008, Angle Company had an installment account receivable from Kay Bluhm with a balance of $1,800. During 2008, $400 was collected from Bluhm. When no further collection could be made, the merchandise sold to Bluhm was repossessed. The merchandise had a fair market value of $650 after the company spent $60 for reconditioning of the merchandise.

The merchandise was originally sold with a gross profit rate of 40%.

Instructions Prepare the entries on the books of Angle Company to record all transactions related to Bluhm during 2008. (Ignore interest charges.)