Accounting for Upfront Fees and Recording and Allocating Revenue

CharterX Inc. establishes a contract with a customer to deliver both a cable television receiver (equipment) and cable television service for 15 months. In exchange, the customer pays a $300 upfront fee for installation of the cable television receiver (which must be returned to CharterX Inc. at the end of the contract term) and pays $320 a month for the premium package of 200+ channels. The $300 upfront fee has no standalone selling price as it is not sold separately. The $320 charge per month for cable services is at its standalone selling price. The company has determined that the contract for the receiver is not a lease.

THIS IS PART B

(2) Record the entry by the seller at the initiation of the contract assuming 100 new customers sign up for the bundled option. (3) Record the entry by the seller one month after initiation of the contract. (2) Record the entry by the seller at the initiation of the cont Account Name Dr. Accounts Receivable Cash Contract Asset Prepaid Expense Cost of Goods Sold one month after initiation