a. How does the company recognize its revenue to Customer A and Customer B? b. Make a journal on February 1, 2020 and March 1, 2020 (if any)?
a. How does the company recognize its revenue to Customer A and Customer B? b. Make a journal on February 1, 2020 and March 1, 2020 (if any)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On February 1, 2020, the telecommunications company sold cellular phones and unlimited calls service to Customer A on a 24 month contract. Customer A pays CU30 per month for network and telephone services
mobile 'free'. The Company sells Customer B the same cellular telephone for CU 150 and the same network services for CU 25 per month. The amount is also the price the company charges when the cellular phone or network service is sold separately. The time value effect of money is negligible in this case. Based on the above case, answer the following questions:
a. How does the company recognize its revenue to Customer A and Customer B?
b. Make a journal on February 1, 2020 and March 1, 2020 (if any)?
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