A companysigns a contract on 1 July 2020 with B companyto provide and service switching equipment for a new exchange. The contract provides for 4 annual payments (in arrears) of 50,000 on 30 June each year. If sold separately the equipment would have a sale price of 150,000 and a 4 year service contract would cost 50,000. The equipment is shipped immediately and if B borrowed the money from the local bank the interest rate would be 8% which indicates a low credit risk. A has a 30 June year end.

Prepare journal entries for A to record the above on

1. 1 July 2020
2. 30 June 2021