Tablet Tailors sells tablet PCs combined with Internet service(Tablet Bundle A) that permits the tablet to connect to the Internetanywhere (set up a Wi-Fi hot spot). The price for the tablet and a4-year Internet connection service contract is $490. The standaloneselling price of the tablet is $245 (cost to Tablet Tailors $150).Tablet Tailors sells the Internet access service independently for anupfront payment of $10000, plus $66 payments at the beginning ofyears 24 of the contract. With an imputed interest rate of 8%, thestandalone value of the service is $270. On January 2, 2014, TabletTailors signed 100 contracts, receiving a total of $31,991 in cash(full payment of $490 each in cash, less the present value of thenote for the future service plan payments), delivered tablets, andstarted service for 100 tablet packages.

Consider the following information and respond to the requirementsindicated.

Prepare the journal entries when the contract is signed inJanuary 2, 2014 and at December 31, 2016, for those contracts. Assumethe modification does not result in a separate performanceobligation. (Credit account titles are automatically indented whenthe amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles andenter 0 for the amounts. Round answers to 0 decimal places, e.g.5,275.)