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Cozy Home Inc. offers its customers two furnace maintenance services. One service is for a one-time cleaning and servicing of a home furnace at a cost of $100. Customers can earn a 5% discount from this price if they pay before Cozy's calendar fiscal year end for maintenance services to be performed in the following year. The second service offered by Cozy is a three-year maintenance plan that sells for $250. The first year's maintenance service for this three-year plan will be delivered before Cozy's fiscal year end. No discount for early payment is offered for the second plan.
Question (a) Prepare the summary journal entry for the cash sale of 200 one-time plans for the current year, 100 discounted one-time plans for the following year, and 300 three-year maintenance plans.
Question (b) Determine the balance sheet classification of the unearned portion of the revenue collected.
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