On January 1, 2020, LeRoy Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $75 per month. The contract includes a smartphone for which the customer pays $300 on the date that the contract is signed. LeRoy also sells the smartphone and monthly service plan separately, charging $750 for the smartphone and $75 for the monthly service for the unlimited talk and 5 GB data wireless plan.

Required

a. Calculate the transaction price for the smartphone and unlimited talk and 5GB data wireless plans assuming that LeRoy allocates consideration based on stand-alone prices.

b. Record the initial journal entry for LeRoy Companys sale of a 2-year contract on January 1, 2020 and the monthly journal entry