Potter's Home Goods sells furniture and electronic items. The majority of its business is on credit, and the following information is available relating to sales transactions for 2012, 2013, and 2014.

Instructions:
Prepare the journal entries for the years 2012-2014 assuming Potter's uses the installment sales method for revenue recognition and records receivables net of interest.

Transcribed Image Text:

2012 2013 2014 $1 24,000 $138,000 $145,000 Installment sales (net of interest) Gross profit percentage Cash collections on installment sales: . ._ . .. $38,200 18,500 33,700 73,450 65,400 7,100 12,400 Interest 2013 6,150 15,600 Interest-2014 6,400