ACC203 FA 2 - 1T2016 Assignment

Our sales team sells iPads and offers an interest-free period of 12 months to certain customers. These customers received the benefit of having their payment deferred for 12 months. The total amount owing by these customers is $250,000 and we use 7% as our discount rate in all financial transactions. Please advise what the correct accounting treatment would be to record these transactions.

how to treat this issue ?

Our sales team sells iPads and offers an interest-free period of 12 months to certain customers. These customers received the benefit of having their payment deferred for 12 months. The total amount owing by these customers is $250,000 and we use 7% as our discount rate in all financial transactions. Please advise what the correct accounting treatment would be to record these transactions