Furtastic manufactures imitation fur garments. On June 1, 2016, Furtastic made a sale to Willett’s Department Store under terms that require Willett to pay $150,000 to Furtastic on June 30, 2016. In a separate transaction on June 15, 2016, Furtastic purchased brand advertising services from Willett for $12,000. The fair value of those advertising services is $5,000. Furtastic expects that 3% of all sales will prove uncollectible.
Prepare the journal entries to record the transactions above.
1. Record the Furtastic’s sale on June 1, 2016.
2. Record the Furtastic’s purchase of advertising services from Willett on June 15, 2016. Assume all of the advertising services are delivered on June 15, 2016.
3. Record the Furtastic’s receipt of $150,000 from Willett on June 30, 2016.