On December 31, 2011, Wheeler Furniture (a retailer) sells a television and a three-year warranty to a customer. Wheeler would normally sell the television and warranty separately for $2,000 and $400, respectively. The cost of the television to Wheeler is $1,500. As part of a year-end promotion, Wheeler sells the television and warranty together for a reduced price of $2,300. The customer pays in full at the point of sale on the contract-signing.date.
Required:
1. Prepare the journal entry required at the contract-signing date.
2. Prepare the entry required when the television is delivered to the customer.
Wheeler will allocate the transaction price to the two performance obligations on the basis of the standalone selling prices of $2,000 and $400 for the television and the warranty, respectively, as follows:

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The Answer of On December 31, 2011, Wheeler Furniture (a retailer) sells a television and a three-year warranty to a customer. Wheeler would normally sell the television and warranty separately for $2,000 and $400, respectively. The cost of the television to Wheeler is $1,500. As part of a year-end promotion, Wheeler sells the television and warranty together for a reduced price of $2,300. The customer pays in full at the point of sale on the contract-signing.date.
Required:
1. Prepare the journal entry required at the contract-signing date.
2. Prepare the entry required when the television is delivered to the customer.
Wheeler will allocate the transaction price to the two performance obligations on the basis of the standalone selling prices of $2,000 and $400 for the television and the warranty, respectively, as follows:

On December 31, 2011, Wheeler Furniture (A Retailer) Sells a Television