Question

On December 18, Intel receives $259,000 from a customer toward a cash sale of $2.59 million for computer chips to be completed on January 23. The computer chips had a total production cost of $1.59 million. What journal entries should Intel record on December 18 and January 23

Answer 1

Date General Journal Debit Credit

Dec. 18 Cash $259,000

Unearned revenue $259,000

(To record advance receipt of cash)

Jan. 23 Cash (2590000 - 259000) $2,331,000

Unearned revenue $259,000

Sales revenue $2,590,000

(To record cash sale)

Jan. 23 Cost of goods sold $1,590,000

Inventory $1,590,000

(To record cost of goods sold)