We are in the business of selling product X (Large Machinery) We have a new customer, who currently has a competitors product. The sale is constructed as follows,
We take away the old machine and give them a new one. The product is leased. The leasing company gives us the entire value. The Value of the machine traded in has to be paid back to the compettior. I am struggling with the revenue recognition and journalising of all these transactions,

Total sale $7K+tade in $2K. Cheque receieved from the leasing company 9K. Cheque payable to competitor $2K
Curren Journal entires
Dr AR - 7K
CR Revenue -7K

DR Bank - $9K
Cr AR -7K
Cr ? -2K

Dr ? -2K
Cr Bank 2K

The whole of the sale is revenue, and you have acquired an asset to be disposed of later

Cr sales $9K
DR A/R $9K
CR A/P $2K
DR Inventory (S/H) $2K

The lease company pays you for the contract

DR Bank $9K
CR A/R $9 K

The Customer is paid for the trade in

CR Bank $2K
DR A/P $2K

Other considerations are how you dispose of the trade in, whether it is valuable or not, you may debit its value to an account such as Trade-in Allowances if it is of little value