37. Seadrill Engineering licensed software to oil drilling firms for 5 years. In addition to providing the software, the company also provides consulting services and support to ensure smooth operation of the software. The total transaction price is $420,000. Based on standalone values, the company estimates the consulting services and support have a value of $120,000 and the software license has a value of $300,000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes A. a credit to Sales Revenue of $420,000 B. a credit to Sales Revenue for $300,000 and a credit to Unearned Service Revenue of $120,000. C. a credit to Unearned Service Revenue of $120,000 D. a credit to Service Revenue of $120,000 38. On June 1, 2021, Sandhill & Sons sold equipment to James Landscaping Service in exchange for a zero-interest bearing note with a face value of $118800, with payment due in 12 months. The fair value of the equipment on the date of sale was $106800. The amount of revenue to be recognized on this transaction in 2021 is A. $106800 sales revenue and $7000 interest revenue. B. $12000 C. $106800 D. $118800. 39. Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Pharoah Corporation purchased computer equipment, installation and training for a total cost of $120960 on March 15, 2021. Estimated standalone fair values of the equipment, installation, and training are $78000, $50400, and $22800 respectively. The transaction price allocated to equipment, installation and training is A. $120960 for the entire bundle. B. $62400, $40320, $18240 respectively. C. $40320, $40320, $40320 respectively. D. $78000, $50400, $22800 respectively. 40. On July 31, O'Malley Company contracted to have two products built by Taylor Manufacturing for a total of $370,000. The contract specifies that payment will only occur after both products have been transferred to O'Malley Company. Taylor determines that the standalone prices are $200,000 for Product 1 and $170,000 for Product 2. On August 1, when Product 1 has been transferred, Taylor's journal entry to record this event includes a A. debit to Accounts Receivable for $200,000. B. debit to Accounts Receivable for $170,000 C. debit to Contract Assets for $170,000. D. debit to Contract Assets for $200,000 37. Seadrill Engineering licensed software to oil-drilling firms for 5 years. In addition to providing the software, the company also provides consulting services and support to ensure smooth operation of the software. The total transaction price is $420,000. Based on standalone values, the company estimates the consulting services and support have a value of $120,000 and the software license has a value of $300,000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes A. a credit to Sales Revenue of $420,000. B. a credit to Sales Revenue for $300,000 and a credit to Unearned Service Revenue of $120,000. a credit to Unearned Service Revenue of $120,000. C. D. a credit to Service Revenue of $120,000. 38. On June 1, 2021, Sandhill & Sons sold equipment to James Landscaping Service in exchange for a zero-interest bearing note with a face value of $118800, with payment due in 12 months. The fair value of the equipment on the date of sale was $106800. The amount of revenue to be recognized on this transaction in 2021 is A. $106800 sales revenue and $7000 interest revenue. B. $12000. C. $106800. D. $118800. 39. Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Pharoah Corporation purchased computer equipment, installation and training for a total cost of $120960 on March 15, 2021. Estimated standalone fair values of the equipment, installation, and training are $78000, $50400, and $22800 respectively. The transaction price allocated to equipment, installation and training is A. $120960 for the entire bundle. B. $62400, $40320, $18240 respectively. C. $40320, $40320, $40320 respectively. D. $78000, $50400, $22800 respectively. 40. On July 31, O'Malley Company contracted to have two products built by Taylor Manufacturing for a total of $370,000. The contract specifies that payment will only occur after both products have been transferred to O'Malley Company. Taylor determines that the standalone prices are $200,000 for Product 1 and $170,000 for Product 2. On August 1, when Product 1 has been transferred, Taylor's journal entry to record this event includes a A. debit to Accounts Receivable for $200,000. B. debit to Accounts Receivable for $170,000. C. debit to Contract Assets for $170,000. D. debit to Contract Assets for $200,000. 37. Seadrill Engineering licensed software to oil drilling firms for 5 years. In addition to providing the software, the company also provides consulting services and support to ensure smooth operation of the software. The total transaction price is $420,000. Based on standalone values, the company estimates the consulting services and support have a value of $120,000 and the software license has a value of $300,000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes A. a credit to Sales Revenue of $420,000 B. a credit to Sales Revenue for $300,000 and a credit to Unearned Service Revenue of $120,000. C. a credit to Unearned Service Revenue of $120,000 D. a credit to Service Revenue of $120,000 38. On June 1, 2021, Sandhill & Sons sold equipment to James Landscaping Service in exchange for a zero-interest bearing note with a face value of $118800, with payment due in 12 months. The fair value of the equipment on the date of sale was $106800. The amount of revenue to be recognized on this transaction in 2021 is A. $106800 sales revenue and $7000 interest revenue. B. $12000 C. $106800 D. $118800. 39. Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Pharoah Corporation purchased computer equipment, installation and training for a total cost of $120960 on March 15, 2021. Estimated standalone fair values of the equipment, installation, and training are $78000, $50400, and $22800 respectively. The transaction price allocated to equipment, installation and training is A. $120960 for the entire bundle. B. $62400, $40320, $18240 respectively. C. $40320, $40320, $40320 respectively. D. $78000, $50400, $22800 respectively. 40. On July 31, O'Malley Company contracted to have two products built by Taylor Manufacturing for a total of $370,000. The contract specifies that payment will only occur after both products have been transferred to O'Malley Company. Taylor determines that the standalone prices are $200,000 for Product 1 and $170,000 for Product 2. On August 1, when Product 1 has been transferred, Taylor's journal entry to record this event includes a A. debit to Accounts Receivable for $200,000. B. debit to Accounts Receivable for $170,000 C. debit to Contract Assets for $170,000. D. debit to Contract Assets for $200,000 37. Seadrill Engineering licensed software to oil-drilling firms for 5 years. In addition to providing the software, the company also provides consulting services and support to ensure smooth operation of the software. The total transaction price is $420,000. Based on standalone values, the company estimates the consulting services and support have a value of $120,000 and the software license has a value of $300,000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes A. a credit to Sales Revenue of $420,000. B. a credit to Sales Revenue for $300,000 and a credit to Unearned Service Revenue of $120,000. a credit to Unearned Service Revenue of $120,000. C. D. a credit to Service Revenue of $120,000. 38. On June 1, 2021, Sandhill & Sons sold equipment to James Landscaping Service in exchange for a zero-interest bearing note with a face value of $118800, with payment due in 12 months. The fair value of the equipment on the date of sale was $106800. The amount of revenue to be recognized on this transaction in 2021 is A. $106800 sales revenue and $7000 interest revenue. B. $12000. C. $106800. D. $118800. 39. Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Pharoah Corporation purchased computer equipment, installation and training for a total cost of $120960 on March 15, 2021. Estimated standalone fair values of the equipment, installation, and training are $78000, $50400, and $22800 respectively. The transaction price allocated to equipment, installation and training is A. $120960 for the entire bundle. B. $62400, $40320, $18240 respectively. C. $40320, $40320, $40320 respectively. D. $78000, $50400, $22800 respectively. 40. On July 31, O'Malley Company contracted to have two products built by Taylor Manufacturing for a total of $370,000. The contract specifies that payment will only occur after both products have been transferred to O'Malley Company. Taylor determines that the standalone prices are $200,000 for Product 1 and $170,000 for Product 2. On August 1, when Product 1 has been transferred, Taylor's journal entry to record this event includes a A. debit to Accounts Receivable for $200,000. B. debit to Accounts Receivable for $170,000. C. debit to Contract Assets for $170,000. D. debit to Contract Assets for $200,000