Jazz Company manufactures equipment and is a publicly traded…
Jazz Company manufactures equipment and is a publicly traded company. Jazz’s products range from simple equipment to complex equipment systems containing numerous components. • Rose purchased equipment from Jazz and contracts Jazz to install this equipment for a price of $200,000. Installation portion of this service is estimated to have a fair value of $20,000. The cost of the equipment is $78,000. • Rose is obligated to pay Jazz the full $200,000 upon delivery and installation of the equipment. Jazz delivers the equipment on August 1, 2024, and completes the installation of the equipment on October 1, 2024. Assume the equipment and the installations are two distinct performance obligations that should be accounted for separately under IFRS. Required: Prepare the journal entries for Jazz to record this sales arrangement, assuming Jazz receives payment once installation is complete. Jazz uses a perpetual inventory system. Fill in the blue journal entry forms below, note that extra cells to allow for spacing have been provided.