Oriole Tailors sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms.
1
Oriole Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $462. The standalone selling price of the tablet is $228 (the cost to Oriole Tailors is $158). Oriole Tailors sells
the Internet access service independently for an upfront payment of $283. On January 2, 2025, Oriole Tailors signed 110 contracts, receiving a total of $50,820 in cash.
2
Oriole Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $557. Oriole Tailors
provides the 3-year tablet service plan as a separate product with a standalone selling price of $141. Oriole Tailors signed 210 contracts for Oriole Bundle B on July 1, 2025, receiving a total of $116,970 in cash.
(a)
Prepare any journal entries to record the revenue arrangement for Oriole Bundle A on January 2, 2025, and December 31, 2025. (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. Round answers to 0 decimal places, eg. 5,125. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 2, 2025
Cash
50820
Sales Revenue
22675
28145
(To record sales)
Jan. 2, 2025
Cost of Goods Sold
17380
Inventory
17380