On July 1, 2016, the Foster Company sold inventory to the Slate Corporation for $380,000. Terms of the sale called for a down payment of $95,000 and three annual installments of $95,000 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 $148,200. The company uses the perpetual inventory system. Required: 1. Prepare the necessary journal entries for 2016 and 2017 using point of delivery revenue recognition. Ignore interest charges. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 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.) Answer is complete but not entirely correct. No Date General Journal Debit Credit 1 July 01, 2016 Installment receivables 380,000 Inventory 148,200 Deferred gross profit 231,800 2 July 01, 2016 Cash Installment receivables 95,000 95,000 3 July 01, 2016 No journal entry required 4 July 01, 2017 Cash 95,000 Installment receivables 95,000 5 July 01, 2017 Deferred gross profit 58,000 Realized gross profit 58,000