Home Theater Company Has the Following Transaction Related to the Sale

question 168

Essay

Home Theater Company has the following transaction related to the sale of merchandise inventory.
June 1: Sold a home theater system (cost of $\$ 6,200$ ) for $\$ 9,000$ to a customer. The customer paid cash. The sales price included a two-year service contract valued at $\$ 840$ .
Dec 31. Recorded the amount of service contract earned. Journalize the transactions of Home Theater assuming that the company uses the perpetual inventory system.Do not record the cost of goods sold entry.Omit explanations.

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Definitions:

Felsic Composition

Rocks rich in silica and aluminum, characterized by lighter minerals like quartz and feldspar.

Decompression

The reduction in pressure exerted on a material, often leading to changes in its physical state or phase.

Melting Mantle

The process in which the Earth's mantle, the layer between the crust and the core, experiences partial melting to form magma.

Conduction

The transfer of heat or electricity through a substance without substantial movement of the substance itself.