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6. On July 1, 2018, Funky Office Supplies sold and delivered a photocopier along with an agreement to maintain the machine for a two-year period.
6. On July 1, 2018, Funky Office Supplies sold and delivered a photocopier along with an agreement to maintain the machine for a two-year period. The package price was $8,400. On a stand-alone basis, Funky sells the photocopier for $7,500, and the maintenance agreement for $1,500. Additional details follow: Funky's year-end is December 31. The cost of the photocopier for Funky was $5,000. Revenue is recognized annually on the maintenance agreement based on the passage of time. The costs of meeting the obligation to maintain the copier are expensed as incurred. Required: Prepare Funky's journal entries for 2018 and 2019. Assume that the journal entries to expense the costs of maintaining the photocopier have already been processed. 6. On July 1, 2018, Funky Office Supplies sold and delivered a photocopier along with an agreement to maintain the machine for a two-year period. The package price was $8,400. On a stand-alone basis, Funky sells the photocopier for $7,500, and the maintenance agreement for $1,500. Additional details follow: Funky's year-end is December 31. The cost of the photocopier for Funky was $5,000. Revenue is recognized annually on the maintenance agreement based on the passage of time. The costs of meeting the obligation to maintain the copier are expensed as incurred. Required: Prepare Funky's journal entries for 2018 and 2019. Assume that the journal entries to expense the costs of maintaining the photocopier have already been processed
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