The following information is available for the Dassler Company, which began its operations in 2007:

1. Installment method sales

2007 .....$520,000

2008 .......600,000

2. Gross profit percentage

2007 .......20%

2008 .......24%

3. Cash collections on installment method sales

2007 .......25% of 2007 sales

2008 .......55% of 2007 sales

..........30% of 2008 sales

4. Bad debt policy

The company estimates its bad debts to be 2% of installment method sales.

5. Defaults and repossessions

2007 .....$10,000 of 2007 installment method sales, of which $1,000 had been collected

2008 .....$20,000 of 2007 installment method sales, of which $4,000 had been collected

........$15,000 of 2008 installment method sales, of which $2,000 had been collected

The policy of the company is to value repossessed items at 40% of their original selling price.

Required

Prepare the journal entries for 2007 and 2008.