Prepare journal entries for invoicing of the contract on 12 February 2021 and the servicing of the machine on 12 August 2021.
On 27 January 2021, Johnson Engineering Ltd signed a contract to supply a new machine to Yummy Confectionary Ltd for $92,000 (including GST). This includes $75,000 for the machine (excluding GST), $2,000 for delivering and installing the machine (excluding GST) and $3,000 for servicing the machine in 6 months.
Johnson Engineering Ltd delivers and installs the machine on 12 February 2021. An invoice for $92,000 is also given to Yummy Confectionary Ltd on this day.
Yummy Confectionary Ltd transfers $92,000 to Johnson Engineering Ltd on 21 February 2021 via internet banking.
Johnson Engineering Ltd services the machine on 12 August 2021.
Required:
Prepare
Johnson Engineering Ltd’s General Journal:
Date |
Account Names |
Debit |
Credit |
12/2/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(To record the invoice for contract with Yummy Confectionary Ltd) |
|
|
12/8/2021 |
|
|
|
|
|
|
|
|
(To record servicing of the machine supplied to Yummy Confectionary Ltd) |
|
|
Step by step
Solved in 2 steps