Question

1) On January 1, 2017, Frozen delights offers its customers a $3 cash rebate for returning 4 labels. One label is on each carton of ice cream. Based on historical experience, the company estimates that 30% of labels will be redeemed. During 2017, the company sold 1,000,000 cartons of ice cream at $5 each. From these sales, 240,000 labels were redeemed in 2017. The rebate offer expires December 31, 2017.

Prepare journal entries for the sale of the ice cream, the redemption of the labels, and for labels that were not redeemed. Do not forget journal entry descriptions.

2) Johnson is a landlord and requires his new tenant to put down a refundable deposit of $300 along with the first month rent of $600 on August 1, 2017. Record the receipt of the first months rent and deposit. (Assume rent to be earned at the beginning of the month). Do not forget journal entry descriptions.

3)

On September 1, 2017, Coney Co. purchased $4,000 of ice cream cones (for inventory) on account. Record the journal entry for this purchase. Do not forget journal entry descriptions.

Answer 1