Paper Supply Ltd. has contracted with a local copy and print centre to provide packages of plain printer paper, as needed, each month. Each package costs $15 and contains 500 sheets of paper. If the copy and print centre purchases over 1,500 packages in the year, they will receive a volume rebate that reduces the cost per package to $12 each. The sales to the copy and print centre are as follows: January, 80 packages; February, 75 packages; March, 130 packages. Paper Supply Ltd. follows IFRS.

Required:

1. Prepare the journal entries assuming that Paper Supply Ltd. does not expect to meet the threshold for the volume rebate.

2. Prepare the journal entries assuming that Paper Supply Ltd. obtains new information received in March and that they now expect the copy and print centre to meet the threshold for the volume rebate.