Question

On May 1, 2020, Sheffield Company enters into a contract to transfer a product to Eric Company on September 30, 2020. It is agreed that Eric will pay the full price of $24,040 in advance on June 15, 2020. Eric pays on June 15, 2020, and Sheffield delivers the product on September 30, 2020. Prepare the journal entries required for Sheffield in 2020.

Answer 1

Answer: Please see answer in explanation column

Step-by-step explanation:

Date Account titles and explanation Debit Credit

May 1st, 2020 NO ENTRY NO ENTRY

2. Journal to record payment for product on June 15

Date Account titles and explanation Debit Credit

June 15, 2020 Cash $24,040

Unearned Sales Revenue $24,040

3. Journal to record delivery of product on September 30

Date Account titles and explanation Debit Credit

September 30, 2020 Unearned Sales Revenue $24,040

Sales Revenue $24,040