London Corporation has been using the cash method to account for income since its first year of operation in 2011. All sales are made on credit with notes receivable given by the customers. The income statements for 2011 and 2012 included the following amounts:

The balances due on the notes at the end of each year were as follows:

Instructions: Give the journal entries for 2011 and 2012 assuming the installment sales method was used rather than the cashmethod.

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2011 2012 Revenues collection on principal Revenues- interest $32,000 3,600 45,200 $50,000 5,500 52,020 Cost of goods purchased 2011 2012 Revenues collection on principal Revenues- interest $32,000 3,600 45,200 $50,000 5,500 52,020 Cost of goods purchased Includes Increase in inventory of goods on hand of $2,000 in 201 and $8,000 in 2012