Bell Ltd has introduced a new mobile phone prepaid package. It sells a mobile phone with prepaid calls for a total price of $240. (Transaction Price)

(Value Received) The stand-alone price of the mobile phone is $200. The customer receives $100 of credit on phone calls for up to one year from the time the account is activated. Effective discount = $60, or 20% Phone calls are charged at $0.25 per minute.

1. Identify the relevant facts

2. Define the accounting policy issues

3. Identify relevant accounting standards, rules & principles

4. Identify alternative accounting treatments

5. Evaluate alternatives based on principles identified at step 3

6. Choose policy