ABC has the following arrangement with Henderson Inc $$ Henderson purchases equipment from ABC for a price of $$1,200$ and contracts with ABC to install the equipment. ABC charges the same price for the equipment irrespective of whether it does the insta$0$llation or not. Using market data, ABC determines installation service is estimated to have a fair value of $$50.$

The cost of the equipment is $$750.$ Henderson is obligated to pay ABC the $$1,200$ upon the delivery and installation of the equipment. ABC delivers the equipment on June $1,20$XX$,$ and completes the installation of the equipment on September $30,20$XX$..$ Assume that the equipment and the installation are two distinet performance obligations which should be accounted for separately.

Instructions:

$($a$)$ How should the transaction price of $$1,200$ be allocated among the service obligations?

$($b$)$ Prepare the journal entries for ABC for this revenue arrangement in $2020$ assuming ABC receives full payment when installation is completed.