Starting from Year 1, General Electric Store entered into a contract with a manufacturing company to purchases and sell cordless phones on an installment plan with collections over 10 months. Due to a considerable period of time collect the selling price, the store added extra interest and carrying charges which amounted to 10% of selling price. For income tax purposes, the store elected to report income from its sales of cordless phones under the installment method of accounting. The store used perpetual inventory system.

Concerning the installment activities, the following information were available.

1. Sales and Gross Profit rates under installment plan were as follows :

Unit sold
Quantity	Sales price (per unit)	Gross profit rate on installment sales (excluding interest and carrying charges)
Year 1 3,000 Year 2 7,000 Year 3 6,800	$ 150 140 145	20% 25% 27%

2. Collections on Installment Contract receivable during Year 3 were as follows :

	Selling price	Interest & carrying charges	Total cash collected
Year 1 Installment Contracts Receivable Year 2 Installment Contracts Receivable Year 3 Installment Contracts Receivable	$ 40,000 90,000 96,000	$ 4,000 9,000 9,600	$ 44,000 99,000 105,600

3. Additional data for regular sales were also available as follows

Regular sales in cash (Year 3) $ 300,000

Cost of goods sold (regular sales Year 3) 200,000

4. For the whole corporation, total selling and administration expenses for year 3 was determine as $ 150,000. However, no charges has yet been made for the applicable insurance expense under a three year policy expiring June 30 Year 4, costing $ 8,700.

Required :

1. Journal entries to record the transactions for General Electric Corporation relating to Installment activities during Year 3.

2. Adjusting entries on December 31, Year 3 concerning Installment activities.

3. Prepare an Income Statement for General Electric Store for the year ended December 31, Year 3. Use proper format. Include all the available information.