Question

hat is the journal entry Pogrund makes to record the receipt of the $10,000 good faith deposit on December 31, 2019? What is the journal entry Pogrund makes on March 31, 2020 to record the receipt of an additional $85,000 from David Corporation when it signs the contract? What is the journal entry Pogrund makes on June 30, 2020 when David notifies Pogrund that it is terminating the contract?

Answer 1

Answer:

June 30 ,2020

Dr Deposit Account($85,000+$10,000)

$ 95,000

Cr To Profit & Loss/ Income Account $ 95,000

Explanation:

A.

December 31. 2019

Dr Bank/Cash Account $ 10,000

Cr To Deposit Account $ 10,000

B.

MARCH 31, 2020

Dr Bank/Cash Account $ 85,000 DR

Cr To Deposit Account $ 85,000 CR

C.

June 30 ,2020

Dr Deposit Account($85,000+$10,000)

$ 95,000

Cr To Profit & Loss/ Income Account $ 95,000

Being Contract is Terminated by David Corporation in which the Amount is Forfieted.