On July 1, 2016, the Foster Company sold inventory to the Slate Corporation for $110,000. Terms of the sale called for a down payment of $27,500 and three annual installments of $27,500 due on each July 1, beginning July 1, 2017. Each installment also will include interest on the unpaid balance applying an appropriate interest rate. The inventory cost Foster $34,100. The company uses the perpetual inventory system.

3. Prepare the necessary journal entries for 2016 and 2017, applying the cost recovery method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the installment sale of $110,000 using the cost recovery method when the inventory had a cost of $34,100. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Record entry Clear entry View general journal