Newport Sales Company started operations in Year 1. It sells merchandise on the installment plan and on regular 30-day open accounts. Activities for Year 1 are summarized below:

Regular sales $ 360,000

Installment sales, including $90,000 deferred interest and carrying charges $ 690,000

Cost of regular sales $ 203,000

Cost of installment $ 360,000

Operating expenses $ 177,000

Collection on regular sales $ 310,000

Collection on installment sales, including $ 30,000 interest and carrying

charges, all of which were earned in Year 1 $ 255,000

Newport Sales uses the perpetual inventory system and does not include interest and carrying charges in the computation of gross profit on installment sales.

Instructions :

Prepare journal entries to record all transactions for Year 1, including the establishment of deferred gross profit at adjusting entries, using only the information given in the problem. Assume that the installment method of accounting is used. Closing entries are not required.