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30 October, 11:07

On November 1, 2021, Green Valley Farm entered into a contract to buy a $150,000 harvester from JohnDeere. The contract required Green Valley Farm to pay $150,000 in advance on November 1, 2021. Theharvester (cost of $110,000) was delivered on November 30, 2021. The journal entry to record thecontract on November 1, 2021 includes a

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  1. 30 October, 13:30
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    Journal Entry

    Explanation:

    The Journal Entry is shown below:-

    Cash Dr, $150,000

    To Unearned sales revenue $150,000

    (Being receipt of cash in advance is recorded)

    Therefore to record the inflow funds we debited cash and to record the liability/obligation to deliver such goods we credited unearned sales revenue.
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