Essay
Typhoon Sons & Co.manufactures various types of golf clubs to third party vendors.On April 1,2016,Typhoon delivers a large quantity of golf clubs to Resona Country Club.Under the sales agreement,Resona is obligated to pay Typhoon $200,000 within six months.On May 1,Typhoon purchases for cash the right to advertise its products during Resona's annual golf tournament event for $3,000.Resona normally charges $2,500 for such services.On August 15,Resona pays Typhoon all amounts owed.
Required: Prepare the journal entries Typhoon should record to account for the transaction on April 1,May 1 and August 15.Indicate the amount of revenue that Typhoon should recognize on its sale of golf clubs to Resona.
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