Optimus Ltd provides telephone services to its customers.

Optimus recently advertised the following; $$300$ bundle

including a mobile phone and a phone sim card sold for $$280$

if purchased online, which the customer pays at the time of

entering into the contract. Once the contract is signed by a

customer, Optimus Ltd will supply a mobile handset and a

prepaid sim card.

If these items were sold separately, the handset would be

sold for $$200$ and the prepaid sim card would provide access

to $$100$ worth of phone calls, total of $$300.$

The prepaid sim card will be active until either the $$100$

worth of calls is expired or the end of a three$-$month period

beginning on the day that the contract is entered into.

The directors are wondering how to apply the five$-$step

model per accounting standard to record revenue for online

sales including journal entries. The directors are keen to

understand each step with thorough explanations. The

company$$s financial reports are prepared on a monthly

basis.

Required:

Part A

Assume one customer purchased mobile phone and sim card bundle for $$280$ online $1$ December $2022.$ Provide

journal entries at the time of sale and when the sim expires. Narrations required.