Billy Hardware takes pride as the "shop around the corner" that can compete with the big-box home improvement stores by providing good service from knowledgeable sales associates (many of whom are retired local handymen). Billy has developed the following two revenue arrangements to enhance its relationships with customers and increase its bottom line. 1. Billy sells a specialty portable generator that is popular with many of the local customers for use at their cabins. The Billy generator is a standard manufacture generator that Billy modifies so the generator can be used for a variety of tasks. Billy sold 60 of these generators during 2020 at a total price of $ 120,000, with a warranty guarantee that the product was free of any defects. The cost of generators sold is $ 84,000. The assurance warranties extend for a 3-year period with an estimated cost of $3,500. In addition, Billy sold extended warranties related to 10 Billy generators for 2 years beyond the 3-year period for $ 300 each. 2. To bolster its already strong customer base, Billy implemented a customer loyalty program that rewards a customer with 1 loyalty point for every $10 of purchases on a select group of Billy products. Each point is redeemable for a $1 discount on any purchases of Billy merchandise in the following 2 years. During 2020, customers purchased select group products for $ 200,000 (all products are sold to provide a 40% gross profit) and earned 20,000 points redeemable for future purchases. The standalone selling price of the purchased products is $ 200,000. Based on prior experience with incentives programs like this, Billy expects 14,000 points to be redeemed related to these sales (Billy appropriately uses this experience to estimate the value of future consideration related to bonus points). Prepare the journal entries for Billy related to the sales of Billy generators with warranties. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) Prepare the journal entries for the bonus point sales for Billy in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) eTextbook and Media List of Accounts How much additional sales revenue is recognized by Billy in 2021, assuming 8,000 bonus points are redeemed? (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,125.) Additional Sales Revenue $
