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Question - Magilla Compressor Company manufactures specialty industrial equipment. Its customer, Gorilla, order a specialty compressor for its Chicago manufacturing complex. The contract calls for Magilla to manufacture the compressor according to specification and to install it at the Chicago complex. The terms of the contract require Gorilla to pay the full contract price of $30,000,000 within 10 days after the installation is completed. The cost of manufacturing the equipment is $22 million. Magilla has a policy of installing its products for its customers free of charge (in other words, the contract price would be $30,000,000 even if Magilla did not do the installation). The fair value of the installation service is $300,000.
Magilla delivered the compressor to the Chicago facility on March 31, 2017. Installation was completed on April 11, 2017. Payment was received by Magilla on April 20, 2017.
Please prepare the appropriate entries for Magilla on the following dates:
1. March 31, 2017
2. April 11, 2017
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