You normally sell a particular piece of equipment for $14,000. You also offer a three-year maintenance package for $120 per month.

You offer the following package deal to your customers: They can purchase the equipment at a discounted price of $9,000 if they agree to a three-year maintenance contract at a price of $180 per month.

One of your customers purchases the package on January 2, 20x5. The monthly payments of $180 are due at the end of each month with the first payment due on January 31, 20x5.

Required Write the journal entries on January 2, 20x5 and January 31, 20x5. Assume that the effects of discounting are immaterial.