Vaughn Windows manufactures and sells custom storm windows for three-season porches. Vaughn 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. Vaughn enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,440 and chooses Vaughn to do the installation. Vaughn charges the same price for the windows irrespective of whether it does the installation or not. The customer pays Vaughn $2,040 (which equals the standalone selling price of the windows, which have a cost of $1,130) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Vaughn completes installation on October 15, 2020, and the customer pays the balance due. (a) Vaughn estimates the standalone selling price of the installation based on an estimated cost of $420 plus a margin of 30% on cost. Prepare the journal entries for Vaughn in 2020.

Date Account Titles and Explanation Debit Credit Jul. 1, 2020 No Entry 0 No Entry (To record contract entered into) Sep. 1, 2020 Cash 2040 Accounts Receivable 400 (To record sales) (To record cost of goods sold) Oct 15, 2020 (To record payment received)