Show all relevant journal entries to record the revenue

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Question - The company offers two packages as follows: Package A sells a tablet with 5 years of network service. The contract price for the tablet and a 5-year network connection service is £600. The standalone selling price of the tablet is £300. Speedy Link sells the network access service independently for an upfront payment of £420. On 3 January 2021, Speedy Link signed 100 contracts, and customers paid the contract price in cash.

Package B includes the tablet and network service plus a service plan (for any upgrades to the tablet or the network connections) for the tablet during the 5-year contract period. The contract price for this package is £750. Speedy Link provides the 5-year tablet service plan as a separate product with a standalone selling price of £200. Speedy Link signed 400 contracts for Package B on 1 July 2021, and customers paid the contract price in cash.

Required -

(a) Show all relevant journal entries to record the revenue associated with this sale of Package A on 3 January 2021, and 31 December 2021.

(b) Show all relevant journal entries to record the revenue associated with this sale of Package B on 1 July 2021, and 31 December 2021.

Reference no: EM133132895

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