Cullumber's Agency sells an insurance policy offered by Oriole Insurance Company for a commission of $160. In addition, Cullumber will receive a further commission of $44 each year for as long as the policyholder does not cancel the policy. After selling the policy, Cullumber does not have any remaining performance obligations. Based on its significant experience with these types of policies, Cullumber estimates that policyholders on average renew the policy for 3.5 years. It has no evidence to suggest that previous policyholder behaviour will change.

(a)Determine the transaction price of the arrangement for Cullumber, assuming 105 policies are sold. Transaction price $32970

Prepare the journal entry, assuming that the 105 policies are sold in January 2023 and that Cullumber receives cash for commissions from Oriole. (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. List all debit entries before credit entries.)