Sider Inc., a registered broker, enters into a finder’s fee agreement with HOM Homes Ltd. on June 15, 2020. Sider will find leads in the form of buyers potentially interested in purchasing HOM’s real estate holdings. Along with finding potential buyers, Sider helps negotiate the selling price and provides advice on contract details. If and when HOM closes a sale, Sider will be paid within 30 days of the closing date, based on the following formula: 5% of any transaction value up to and including $1 million, plus 4% of any transaction value greater than $1 million and less than and including $2 million, plus 3% of any transaction value greater than $2 million and less than and including $3 million, plus 2% of any transaction value greater than $3 million and less than and including $4 million, plus 1% of any transaction value in excess of $4 million. If Sider is represented by another broker and this information is not shared with HOM, the fee is reduced by 50%. On September 1, 2020, HOM paid Sider $50,000 to provide some needed cash flow for seeking out buyers. On October 15, 2020, an offer was made and accepted for a parcel of real estate at a price of $3.5 million. The transaction closed on November 1, 2020, and Sider was paid the finder’s fee net of $50,000 on November 30, 2020.

Instructions

Explain the accounting treatment of the above events for Sider Inc. and prepare any journal entries needed on:

a. June 15, 2020

b. September 1, 2020

c. October 15, 2020

d. November 1, 2020

e. November 30, 2020