The Dyson Company sells computer games to teenagers. Selected accounts included in the trial balance at December 31, 2007 and 2008 are as follows:

During 2007 installment method sales and cost of goods sold were $200,000 and $160,000, respectively. In 2007 the company repossessed games that had been sold in 2006 for $6,000 and on which $2,500 had been collected. The games were believed to be worth $1,000. No repossessions occurred on 2007 sales.
Required
Prepare summary journal entries for2007.

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2006 2007 Installment accounts receivable, 2006 Installment accounts receivable, 2007 Allowance for doubtful installment accounts receivable, 2006 Allowance for doubtful installment accounts receivable, 2007 Deferred gross profit, 2006 Deferred gross profit, 2007 $80,000 (5,000) (16,000) $ 20,000 112,500 (7.000) (3,500 (22,500)