Revenue recognition (12 marks)

Lyon House Products Ltd. (LHPL) sells fences, decks, and landscaping services to new homeowners. The fences, decks, and landscaping services can be bought individually, or as a package. The fences and decks are sold as completed items. Landscaping services consist of two years of lawn mowing and snow clearing (depending on the season), which is provided evenly over the two-year period. Each sales order is customized to the needs of the customer. On October 1, 2020, LHPL sold a complete package, on account to Ryker Builders for $50,000, with payment due on December 1, 2020. If each component had been purchased separately, the price would have been:

Fence: $19,250

Deck: $22,000

Landscaping services: $13,750

LHPL received payment on December 1, 2020.

Required:

Provide the journal entries for LHPL related to this sale for the year 2020, assuming LHPL has a December 31 year end. Assume all cost of goods sold entries have already been made. Round all entries to the nearest dollar.