Making journal entries-by-product PDQ Manufacturing Co. makes one main product, \(\mathrm{X}\), and a by-product, \(Z\), which splits off from the main product when the work is three-fourths completed. Product \(\mathrm{Z}\) is sold without further processing and without being placed in stock. During June, \(\$ 1,200\) is realized from the sale of the by-product.

Make the entries to record the recovery and sale of the by-product, on account, on the assumption that the recovery is treated as one of the following:

a. A reduction in the cost of the main product

b. Other income