Adam's Adorable Creations Company provided the following financial information for its installment sales for the current year.

Financial Data:

Installment sales for current year $3,000,000

Cost of goods sold on installment basis $1,500,000

Repossessed merchandise: Estimated value $18,000

Repossessed merchandise: Unpaid balances $65,000

Payments by customers $2,000,000

Required:

(a) Prepare journal entries for the end of the year based on the information above.

(b) Prepare the entry to record the gross profit realized in the current year.