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Question: Westinghouse Appliances was holding a fall sale on its refrigerators.
George and Lisa visited the store eager to find a new fridge to replace the one at home that had just quit working that morning. On September 1, 2020, they purchased a Princess refrigerator on sale for $3150 on the condition of signing a 24 month service agreement at $115 per month. The service agreement would be billed monthly with payments to begin September 30th. The fridge was delivered to their house that day.
Sold separately, the refrigerator's price would be $3,850 and a two year service agreement would be $90 per month.
Required: Based on your knowledge of revenue recognition, record the necessary revenue related journal entries that Westinghouse would make for the sale to George and Lisa for the month of September. Round your answers to the second decimal place.
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