Mason Technology is a full-service technology company. Prices for their equipment, installation services, and training are $97,500, $15,000 and $37,500 respectively. Training takes place over a period of three months. Customers can purchase any product or service separately or as a bundled package. Customer Corporation purchased computer equipment, installation, and training for a total cost of $144,000. Chase delivered and installed the equipment on November 1, Year 1 and received cash of $144,000. Training began that same day.
A. Prepare the journal entry necessary on November 1.
B. Prepare the journal entry necessary at December 31.
| Date | General Journal | Debit | Credit | ||
| Nov 1 | Cash | $144,000 | |||
| Sales Revenue | $93,600 | ||||
| Service Revenue | $14,400 | ||||
| Unearned Service Revenue | $36,000 | ||||
| Dec 31 | Unearned Service Revenue | $24,000 | ($36,000 x 2/3) | ||
| Service Revenue | $24,000 | ||||
| Working | |||||
| Standalone Price | Percentage | Price | Allocated | ||
| Equipment | $97,500 | 65.00% | $144,000 | $93,600 | |
| Installation services | $15,000 | 10.00% | $144,000 | $14,400 | |
| Training service | $37,500 | 25.00% | $144,000 | $36,000 | |
| $150,000 | $144,000 | ||||
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