Waterway Ranch & Farm is a distributor of ranch and farm equipment. Its products include small tools, power equipment for trench-digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company catalogue and Internet site. However, given some of its specialty products, select farm implement stores carry Waterways products. Pricing and cost information on three of Waterways most popular products are as follows.

Item		Stand-Alone Selling Price (Cost)
Mini-trencher		$ 4,032	($2,240)
Power fence hole auger		1,344	($896)
Grain/Hay dryer		15,680	($12,320)

Respond to the requirements related to the following independent revenue arrangements for Waterway Ranch & Farm. IFRS is a constraint.

A)On January 1, 2017, Waterway sells augers to Mills Farm & Fleet for $53,760. Mills signs a six-month note at an annual interest rate of 12%. Waterway allows Mills to return any auger that it cannot use within 60 days and receive a full refund. Based on prior experience, Waterway estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Waterways costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entry for Waterway on January 1, 2017 to record sale and to record cost of good sold. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

B)On August 10, 2017, Waterway sells 12 mini-trenchers to a farm co-op in western Canada. Waterway provides a 4% volume discount on the mini-trenchers if the co-op has a 15% increase in purchases from Waterway compared to the prior year. Given the slowdown in the farm economy, sales to the co-op have been flat, and it is highly uncertain that the benchmark will be met. Prepare the journal entry for Waterway on August 10, 2017 TO record cash sale and to record cost of good sold. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)