Answer:
(a) Debit Cash for $25,200; Credit Deferred sales revenue for $25,000.
(b) Debit Cash for $2,26,800; Debit Deferred sales revenue for $25,200; and Credit Sales revenue for $252,000.
Step-by-step explanation:
(a) What journal entries should Pace record on December 12?
The receipt of part-payment of $25,200 from a customer on December 12, 2021 creates a deferred sales revenue which will appear as under current liabilities. The journal entries that Pace should record on December 12, 2021 will therefore look as follows:
Date Account Title Dr ($) Cr ($)
12 Dec '21 Cash 25,200
Deferred sales revenue 25,200
(To record a deferred sales revenue from diodes.)
(b) What journal entries should Pace record on January 16?
On this date, the customer will pay the remaining amount. The amount in the Deferred sales revenue account will now be transferred to the Sales Revenue account and there will be no liability again. The journal entries that Pace should record on January 16, 2022 will therefore look as follows:
Date Account Title Dr ($) Cr ($)
16 Jan '22 Cash (w.1) 2,26,800
Deferred sales revenue 25,200
Sales revenue 252,000
(To record sales revenue from diodes.)
Workings:
w.1: Cash = Sales revenue - Deferred sales revenue = $252,000 - $25,200 = $2,26,800