supply agreements question under GAAP

Apr 27, 2009 0 Replies

I need some help with an issue described below. Company B is a supplier for Company A. Company B offers company A $200,000 in merchandise credit in return for an exclusive supply agreement for one year. The credit is expected to be fully used within 2 weeks. Company A accepts the deal from Company B to allow them to become the exclusive supplier for the $200,000 merchandise credit How would you recognize this on A's books and any reference to the fasb code would be helpful.


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