Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please ensure I did part 1 right and also help me with part 2. I'm unsure what journal entries I'm missing. For both parts, only
Please ensure I did part 1 right and also help me with part 2. I'm unsure what journal entries I'm missing.
For both parts, only possible journal entries are: Cash, deferred revenue, and sales revenue
Problem 9 (extended warranty] Assume that on July 1, 2020 you paid cash to purchase a television from Best Buy for $500. At the check-out stand, the cashier asked if you wanted to add a two-year extended warranty for an additional $100. You opted for the extended warranty and paid the cashier $600 cash plus sales tax (ignore the sales tax). Assume that Best Buy's fiscal year ends December 31, 2020. The television comes with a manufacturer's one-year quality assurance warranty. 1. Prepare the journal entry made by Best Buy to record the sale to you on July 1, 2020. Enter your answer below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Debit Credit Entry on July 1, 2020: Account Cash Deferred Revenue Sales Revenue $600 1 1 $ 100 $500 1 2. Prepare any adjusting journal entry related to this sale that Best Buy should make at December 31, 2020. Enter your answer below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Debit Credit Entry on December 31, 2020: Account Deferred Revenue Sales Revenue $25 2 $25 2 2Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started