Eames Fine Furniture sells high-quality furnishings utilizing special payment terms. Customers are regularly allowed to purchase furniture and not make any payments for eight months. Four equal payments must then be made in successive months, starting in the ninth month after the purchase.
Assume that in January the company reported instalment sales totalling $350,000 and the gross margin on these sales is 30%.
Required: Prepare journal entries to record the January sales and subsequent payments using the instalment sales method