Maximum Inc. (retailer) has a loyalty program that rewards its customers one point per $1 spent. Points are redeemable for $0.20 off future purchases. A customer purchases products (cost of $280) for cash at the usual selling price of $400 and earns 400 points redeemable for $80 off future purchases of goods or services. The retailer expects redemption of 360 points or 90% of points earned.

a.) How should the transaction price be allocated among the performance obligation(s)? Note: Round each allocated transaction price in the table below to the nearest dollar.

b.) Prepare Maximums journal entry to record the $400 sale to the customer where the customer earned 400 loyalty points.