a. Colbert sells 3-D printer systems. Recently, Colbert provided a special promotion of zero-interest financing for two years on any new 3-D printer system. Assume that Colbert sells Lyle Cartright a 3-D system, receiving a $5,000 zero-interest-bearing note on January 1, 2020. The cost of the 3-D printer system is $4,000. Colbert imputes a 6% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on January 1, 2020, and calculate the total amount of revenue to be recognized in 2020.

b. Colbert sells 20 non-refundable $100 gift cards for 3-D printer plastic on March 1, 2020. The plastic has a stand-alone selling price of $100 (cost $80). The gift card expiration date is June 30, 2020. Colbert estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows.

Cumulative Redemption Rate to Date

March 31 50% April 30 80% June 30 85%

Prepare the 2020 journal entries related to the gift cards at March 1, March 31, April 30, and June 30. Round amounts to the nearest dollar.

c. Colbert sells 3-D printers along with a number of retail items. The package price and stand-alone selling prices of each item are as follows. The printer and stand are often sold as a bundle with the bundling discount noted below.

Item

3-D printer (cost $4,000) Custom stand (cost $200)

Special 3-D plastic (cost $135)

Total for bundle

Stand-Alone Selling Price

$5,000 450 175

$5,625

Price When Bundling Bundled Discount

$4,500 $500 450 0 175 0

$5,125 $500

Due to the timing of the deliverythe plastic is delivered six months after the printer is delivered to the customerColbert chooses to account for two performance obligations: (1) the printer and stand, and (2) the plastic. Prepare the journal entries for Colbert on (a) March 1, 2020, when Colbert receives $51,250 for the sale of 10 printer bundles, and (b) September 1, 2020, when the plastic is delivered to customers.