Question
In: Accounting
Chen and sons' management entered into a an agreement on September 1, 2018 to supply its...
- Chen and sons' management entered into a an agreement on September 1, 2018 to supply its internally developed home monitoring system, SafetyFirst, and maintenance support to a regional 24 hour fitness chain. The details of the agreement calls for Chen and Sons to be paid $5,000,000 up front for the equipment and 3 years of maintenance support (beginning on agreement date). The fitness chain could have bought just the equipment for $6,000,000 with no support and they could have independently contracted for the maintenance support for $2,000,000 for the three year period. The cost of the equipment sold was $3,000,000 and Chen and Sons has recorded the $5,000,000 as a point-of-sale transaction.
How is this reconciled on the Trial Balance and adjusted in the appropriate Entry?
Solutions
ekkarill92 answered 3 days agoRelated Solutions
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