Computer Technologies provides maintenance serv- ice for computers and office equipment for compa- nies throughout the Northeast. The sales managers is elated because she closed a $300,000 three-year main- tenance contract on December 29, 2007, two days be- fore the company's year-end. "Now we will hit this year's net income target for sure," she crowed. The customer is required to pay $100,000 on December 29 (the day the deal was closed). Two more payments of $100,000 each are also required on December 29, 2008 and 2009. Discuss the effect that this event will have on the company's financial statements.

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