Question: Linde Company is a retailer that offers layaway sales to
Linde Company is a retailer that offers layaway sales to its customers. Assume that Linde sells ¥100,000 of merchandise to Penrod Company on March 1, 2010, and Penrod chooses to use the layaway plan. Linde therefore retains the goods, segregating them from other goods for sale, and accepts a cash deposit for the sale of ¥30,000. Linde requires that final payment for this sale be made in 60 days. If Penrod fails to pay the remaining portion of the sales price, it forfeits its deposit. Linde is confident that Penrod will make the payment due on these sales as it considers the deposit significant. Prepare the journal entry to record the transaction on March 1, 2010.
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