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Manufacturer M, a large equipment manufacturer, enters into a contract to sell Product A to Customer C for an upfront cash payment of 300,000. Upon

Manufacturer M, a large equipment manufacturer, enters into a contract to sell Product A to Customer C for an upfront cash payment of 300,000. Upon signing the contract, Manufac-turer M expects to deliver Product A to Customer C in two years' time. The performance obli-gation will be satisfied at a point in time. Manufacturer M's borrowing rate is 10% (the rate that would be used in a separate financing transaction).

Manufacturer M concludes that the contract contains a significant financing component.

What are the journal entries to record?

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