On January 15, 2025, Mad-City Appliances entered into a sale…
On January 15, 2025, Mad-City Appliances entered into a sales contract with a customer for the sale of a commercial grade freezer. The contract price of $17,500 included the freezer, installation and a 1-year maintenance contract. On a stand-alone basis, Lobner sells the freezer for $15,000 (cost of $12,000), installation for $1,500 and the 1-year maintenance agreement for $3,500. Lobner identifies the sale of the freezer, installation and maintenance agreement as separate performance obligations. The journal entry that Mad-City will record on February 15th, the date the freezer was delivered and installed, will include: (Round all calculations to whole dollars)
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