Sanchez development company uses the installment sales metho

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Sanchez Development Company uses the installment sales method to account for some of its installment sales. On October 1, 2013, Sanchez sold a parcel of land to the Kreuze Corporation for $11 million. This amount was not considered significant relative to Sanchez's other sales during 2013. The land had cost Sanchez $5.5 million to acquire and develop. Terms of the sale required a down payment of $2,200,000 and four annual payments of $2,200,000 plus interest at an appropriate interest rate, with payments due on each October 1 beginning in 2014. Kreuze paid the down payment, but on October 1, 2014, defaulted on the remainder of the contract. Sanchez repossessed the land. On the date of repossession the land had a fair value of $4.0 million.
Prepare the necessary entries for Sanchez to record the sale, receipt of the down payment, and the default and repossession applying the installment sales method. Ignore interest charges. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.
1. Prepare the journal entry to record sale?
2.Prepare the journal entry to recognize the receipt of the down payment.
3.Prepare the journal entry to recognize gross profit from the installment sale
4.Prepare the journal entry to record the sale.Prepare the journal entry to recognize the receipt of the down payment.Prepare the journal entry to recognize gross profit from the installment sale.Prepare the journal entry to record the default and repossession.

Reference no: EM13324555

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