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Provide an explanation for the journal entry to record

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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.

Question 1: 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: EM132930235

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