On 30 September 20X8, NM enters into a contract to transfer Products A and B to a customer in exchange for $100,000. The contract requires Product A to be delivered first and states that the payment for Product A is conditional on the delivery of Product B. Therefore, the consideration of $100,000 is only due after NM has transferred both Products A and B to the customer. NM identifies the promises to transfer Products A and B as separate performance obligations. On the basis of their relative standalone selling prices, NM allocates $40,000 to the performance obligation to transfer Product A and $60,000 to the performance obligation to transfer Product B. On 31 December 20X8, NM transfers Product A to the customer. NM intends to transfer Product B to the customer on 31 March 20X9. 

What accounting entry should NM make to record the transfer of Product A to its customer on 31 December 20X8?

Answer rating: 100% (QA)

To record the transfer of Product A to the customer on December 31 20X8 NM should make the followi... View the full answer