On January 1, 2017, Fulton Inc. enters into a contract with Gibson to deliver goods. Gibson pays $100,000 at the time the contract is signed, at which time the goods are transferred and Fultons performance obligation is complete. In addition, Gibson agrees to pay Fulton $100,000 on December 31, 2017, and December 31, 2018. If Fulton entered into a financing arrangement with Gibson it would charge an interest rate of 9%.

Required:

1. Determine the transaction price for the contract with Gibson.

Transaction price $ _______

2. Prepare the journal entries to record Fultons sales revenue on January 1 and interest revenue on December 31.