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In July 2019, Fitzroy Pty Ltd, an organisation involved in the surfing industry, provides two weeks of surfing lessons to a group of middle-aged executives employed by AFL Pty Ltd. The lessons conclude on 15 July 2019. The contract with AFL Pty Ltd requires it to make two deferred payments of $20,000 each to Fitzroy Pty Ltd on 15 July 2020 and 15 July 2021. Fitzroy Pty Ltd typically provides credit arrangements to such customers at a rate of 8 per cent.
Problem 1: Provide the journal entries for Fitzroy Pty Ltd to account for the revenue to be received from the customer.
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