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Charter Corporation, which began business in 2011, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales during 2011 and 2012:
2011 2012
Installment sales $ 360,000 $ 350,000
Cost of installment sales 234,000 245,000
Cash collections on installment sales during:
2011 150,000 100,000
2012 _ 120,000
Required:
Prepare summary journal entries for 2011 and 2012 to account for the installment sales and cash collections. The company uses the perpetual inventory system.
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