Question

Required information [The following information applies to the questions displayed below.] Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $4,300 per machine. HEC usually sells these machines to hospitals at a price of $7,520. HEC also separately sells 12 months of training and repair services for fMRI machines for $1,880. HEC is paid $7,520 cash on November 30 for the sale of an fMRI machine delivered on December 1. HEC sold the machine at its regular price, but included one year of free training and repair service.

Answer 1

Solution:-

Allocation
equipment = 7,520/(7,520+1,880)*7,520 =   6,016
service = 1,880/(7,520+1,880)*7,520 = 1,504
Journal entries
s.n	Particulars			Debit	Credit
1	Cash			$ 7,520.00
	unearned sale revenue				$ 6,016.00
	unearned service revenue				$ 1,504.00
	(to record cash receive)
2	unearned sale revenue			$ 6,06.00
	sale revenue				$ 6,016.00
	(to record sale revenue from sale)
3	Cost of goods sold			$ 4,300.00
	inventory				$ 4,300.00
	(to record cost of goods sold)