Consider the following facts: - Company B is a technology company. - It sells eq

Question

Consider the following facts:
- Company B is a technology company.
- It sells equipment, installation services as well as training.
- Any training service will be provided to the customer after the equipment is delivered and installed.
- Company A's customers can purchase any product or service separately or as a bundled package.
- Company B purchased computer equipment, installation and training from Company A for a total cost of $120,000 on March 15, 2014.
- Company A estimated the standalone fair values of the equipment, installation and training are $75,000, $50,000 and $25,000 respectively.

The journal entry Company A uses to record the transaction on March 15, 2014 will include a:

None of these answers are correct

credit to Sales Revenue for $120,000.

debit to Unearned Service Revenue of $25,000.

credit to Unearned Service Revenue of $20,000.

credit to Service Revenue of $50,000.

Explanation / Answer

The Journal entry Company A uses to record the transaction on March 15 2014 will include a credit to sales revenue for $120000 .

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