Question
Here's the situation: Company purchases inventory (dresses) from various suppliers. We book that to Inventory Asset. Company rents a dress to it a customer. Customer
Here's the situation: Company purchases inventory (dresses) from various suppliers.
We book that to Inventory Asset.
Company rents a dress to it a customer.
Customer pays company.
We book Revenue. Customer returns dress to company.
Holds it until it is rented by another customer. After some number of rentals, it is no longer in good enough condition or style to be rented again.
At that point the dress is either sold or donated. How / when do we book COGS? What is the timing / amount of movement between COGS and Inventory?
What would the journal entry be for this?
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