Palantir Corp. sells specialized equipment to the healthcare industry. Palantir pays its sales agents a salary plus a 5% commission on sales. Sales agents employed by the company sold 10 Osgilith MRI machines that were delivered and installed in January 2017. The MRI machine sells for $45,600 due at the end of 12 months. Alternatively, customers may elect to pay $40,000 at delivery and installation. All customers purchasing machines during January elected to pay at the end of the 12-month period. Required: 1. Determine the transaction price of the Osgilith MRI machines, and discuss how Palantir would account for the sales commission. 2. Discuss whether the delayed payment contract contains a significant financing component. 3. Prepare the journal entries for 2017 for the Osgilith MRI machines sold by Palantir to customers who elect the delayed payment option. 4. Prepare the 2017 journal entries that Palantir would make for the 10 Osgilith MRI machines that are sold if customers elect to pay at delivery. Chart of Accounts CHART OF ACCOUNTS Palantir Corp. General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 153 Prepaid Sales Commission 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Interest 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings REVENUE 411 Sales Revenue 431 Interest Income EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 523 Sales Commission Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense Analysis Determine the transaction price of the Osgilith MRI machines, and discuss how Palantir would account for the sales commission. The transaction price for 10 machines is when customers elect to pay at the end of the 12-month period. Palantir Corp. should recognize revenue upon delivery and installation in the amount of per machine. In this case, the sales commission is expensed in January when the machines are delivered and installed. The transaction price is the sell price or the cost to the customer. Revenue is calculated using the different pricing options. The treatment of sales commissions depends on the timing of the performance obligation, or the revenue recognition. Discuss whether the delayed payment contract contains a significant financing component. Palantir is receiving payment 12 months after the delivery and installation of the equipment, therefore theywill recognize a portion of the $______received as a financing component. The financing component is therefore$5,600 per machine. General Journal Prepare the journal entries for 2017 for the Osgilith MRI machines sold by Palantir to customers who elect the delayed payment option. Additional instructions: Prepare four entries to record sales and commission on January 1st, and cash received on account and interest earned for the year on December 31st. GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 Prepare the 2017 journal entries that Palantir would make for the 10 Osgilith MRI machines that are sold if customers elect to pay at delivery on January 1. GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4