On July 3 I, O'Malley Company contracted to have two products built by Taylor Manufacturing for a

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Question:

On July 3 I, O'Malley Company contracted to have two products built by Taylor Manufacturing for a total of $370,000. The contract specifies that payment will only occur after both products have been transferred to O'Malley Company. Taylor determines that the standalone prices are $200,000 for Product I and $ I 70,000 for Product 2. On August I, when Product I has been transferred, Taylor's journal entry to record this event includes

a. debit to Accounts Receivable for $200,000.

b. debit to Accounts Receivable for $170,000.

c. debit to Contract Assets for $170,000.

d. debit to Contract Assets for $200,000