Sweet Windows manufactures and sells custom storm windows for three-season porches. Sweet also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Sweet enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,300 and chooses Sweet to do the installation. Sweet charges the same price for the windows irrespective of whether it does the installation or not. The customer pays Sweet $2,080 (which equals the standalone selling price of the windows, which have a cost of $1,160) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Sweet completes installation on October 15, 2020, and the customer pays the balance due.

Sweet estimates the standalone selling price of the installation based on an estimated cost of $440 plus a margin of 20% on cost. Prepare the journal entries for Sweet in 2020.

2 Account Titles and Explanation Debit Credit No Entry 0 No Entry 0 (To record contract entered into) 20 Cash 2080 Accounts Receivable 220 Unearned Service Revenue 528 Sales Revenue 1772 (To record sales) Cost of Goods Sold 1160 Inventory 1160 (To record cost of goods sold) 120 Cash 220 Unearned Service Revenue 528 Service Revenue 528 Accounts Receivable 220 (To record payment received)