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Johnson Company receives royalties on a patent it developed several years ago. Royalties are 4%...

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Accounting

Johnson Company receives royalties on a patent it developed several years ago. Royalties are 4% of net sales, to be received on September 30 for sales from January through June and receivable on March 31 for sales from July through December. The patent rights were distributed on July 1, 2017, and Johnson accrued royalty revenue of $40,000 on December 31, 2017, as follows:

General Journal Debit Credit
Receivable - royalty revenue 40,000
Royalty revenue 40,000

Johnson received royalties of $54,000 on March 31, 2018, and $80,000 on September 30, 2018. In December, 2018, the patent user indicated to Johnson that sales subject to royalties for the second half of 2018 should be $500,000. Required: Prepare any journal entries Johnson should record during 2018 related to the royalty revenue. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1) Record the entry related to the royalty revenue. March 31, 2018

2) Record the entry related to the royalty revenue. September 30, 2018

3) Record the entry related to the royalty revenue. December 31, 2018

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