The Trusett Merchandising Company has an inventory of obsolete products that it formerly stocked for sale. Eforts to dispose of this inventory by selling the products at low prices have not been successful. At the end of the prior year (20X4), the company reduced the value to a conservative estimate of net realizable value of $ 15,000. On 1 March 20X6, Trusett sold this entire inventory to Watson Trading Company for $ 21,000 cash. However, prior to sale, Trusett is concerned about collectability of the account and has decided to use the cost recovery method to record this transaction. Subsequent cash collections have been as follows: 20X6—$ 4,000; 20X7—$ 5,000; and the Final payment in 20X8 was $ 8,000.
Give the 20X6, 20X7, and 20X8 entries for Trusett Merchandising Company to record revenues and cost of sales.