What are the potential revenue recognition issues generated in the following statment? and which recommendations will suggest to solve those issues?

KTSB Manufacturing and Distribution Company, Inc. (KTSB) manufactures and distributes two computers. Model E is its basic model that is designed for everyday use. Model G is designed for the dedicated gamer. Both models come with a three-year manufacturer's warranty, which covers the basic functionality of the product. Only 5% of customers historically have filed claims related to the computers. The models are currently sold across the country via KTSB's website, social media, and targeted TV ads. The company has two manufacturing plants, one in the Pacific Northwest and one in the Pacific Southwest. The company does not have retail stores. The company's sales of the two products have remained stable through its website, but anticipated growth has not materialized. On April 17, KTSB's management entered into an agreement to sell Model E to Ramesses II. Ramesses II is a well-established retail chain and has stores in every state in the continental U.S. It offers personal computers, computer peripheral equipment, and consumer video and audio products. The agreement is vital to the growth of KTSB (see the attached "KTSB and Ramesses II Agreement").

KTSB and Ramesses II Agreement

KTSB received a purchase order from Ramesses II on July 16 for 300 Model E computers to be shipped on August 23, terms n/90. Ramesses II has the right to accept the computers and place them on warehouse floors by September 1. The agreement transfers legal title of the goods to Ramesses II at the point of delivery.

Ramesses II is not allowed to discount the computers to its customers to help move inventory through its warehouses; however, the agreement allowed Ramesses II to return any unsold product within 90 days of purchase.

KTSB developed a manufacturer's coupon, entitling customers to $100 off Model E, with a 90-day expiration date. The coupon would allow customers to redeem it on purchases from either KTSB's website or through sales in Ramesses II's stores. Ramesses II would be reimbursed from KTSB for any coupons received from Ramesses II's customers. The coupon, one per customer, would be advertised nationwide on September 1, explicitly redeemable only at KTSB and at point-of-sale at Ramesses II.

Ramesses II agreed to sell KTSB's gift cards in addition to other retailers' gifts cards at its kiosks. KTSB agreed to pay a 3% commission to Ramesses II on the value of the gift cards sold at Ramesses II. The industry standard, and the commission rate used by both Ramesses II and KTSB, is typically 2.5%.

Ramesses II will accept all warranty claims for the computers at its warehouses within the first year of sale to its customers, thus providing a convenient option for customers experiencing problems with the product. KTSB has instructed Ramesses II to provide customers who purchased the Model E the option of a refund or exchange for a new Model E. Ramesses II will send these products back to KTSB, and KTSB will reimburse Ramesses II for the refund or exchange amount and shipping costs. After the first year, all warranty claims must be made directly to KTSB.