Recording a Payment by Seller to Customer

On March 18, 2020, Kudos Corporation sells snack products to a retail warehouse club chain in the amount of $75,000 (cost of $45,000). The contract includes an obligation for the warehouse club to run certain advertising campaigns for the snack products in exchange for $6,000 cash from Kudos Corporation on the contract date. The comparable price for this type of advertising campaign to be conducted by a third party is $6,000.

a. Prepare Kudos journal entry on March 18, 2020, for the sale of merchandise and the purchase of advertising services. b. Assume instead that Kudos sold $75,000 of product to a customer (cost of $45,000) and has agreed to pay the customer $1,500 in slotting fees for preferential product placement in displays. Kudos will pay the $1,500 fee on April 30, 2020. Prepare Kudos journal entry on March 18, 2020, for the sale of the product and on April 30, 2020, for the payment of the slotting fee.

Note: If a journal entry (or a line of the journal entry) isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero).

a.

Account Name	Dr.	Cr.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
Sales Revenue	Answer	Answer
To record the sale of product.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
To record the cost of sale of product.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
To record the payment for advertising.

b.

Account Name	Dr.	Cr.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
Sales Revenue	Answer	Answer
To record the sale of product.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
To record the cost of sale of product.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
To record the payment for advertising.

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