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Machiavelli's Cable Co. sells different cable television packages to its customers. The firm sells a one-year contract called Maximum Value Package, which includes installation services, premium channels for 1-year, regular channels for 1 year, and a cable box. On January 1, 2017, the firm has sold 1 million of these packages for $1,000 each. These components can be purchased separately according to the following information:
Regular channels $30 per monthPremium Channels $40 per monthInstallation services $60 (one-time fee)Cable box $300 per unit
Question 1: Prepare the journal entries at the time of sale (January 1, 2017). Assume all customers paid in cash (no credit sales).
Question 2: Additionally, assume the firm records adjusting entries at the end of each month. Prepare the entries that would be recorded at the end of January 2017.
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