Identify the proper accounting for this transaction

Reference no: EM132991578

Part 1: The Company is looking to begin a new program, exclusively for teachers, whereby a participant purchases a new Steinway Model A (Retail Price of $100,000) at a discount of 30% and financed (internally) over a 10-year period at a 0% interest rate for the customer. Financing for our customers as provided by an external provider is typically 9% and the Company believes this is a reasonable discount (interest) rate for participants in this program.

Please identify the proper accounting for this transaction and provide an explanation for the journal entry to record the initial sale and go-forward accounting for the transaction on a month to month basis over the life of the transaction.

Reference no: EM132991578

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