AP$4-2$A $($Revenue recognition$)$

TreeHold Corp. designs and builds custom harvesting equipment for logging companies across Canada. The company, which is publicly traded, has a May $31$ year end. On February $18,2020,$ TreeHold signed a contract with Coastal Harvesting Ltd$.$ to design and build $25$ custom harvesters that can harvest wood at the steep grades found along much of the Pacific coast timber stands included in Coastal's harvesting leases. The following events took place in $2020$ in relation to the contract:

February $18$: Officials from TreeHold and Coastal sign the contract. The contract was for $$4\mathrm{.}1$ million. TreeHold is to design, manufacture, and deliver the $25$ machines to Coastal's operations centre in Duncan, British Columbia. TreeHold's management estimates that the design component of the contract would be valued at $$510,000$ if contracted for separately, while the machine construction component of the contract would be valued at $$4$ million if the machines were purchased separately. TreeHold agrees to provide a three$-$year assurance$-$type warranty for the machines, and the company's management estimates that the warranty claims would total $$230,000$ based on past experience. Coastal agrees to pay a $$1,250,000$ deposit within $10$ days of signing the contract and to pay the balance within $15$ days of the equipment being delivered.

February $25$: Coastal pays the deposit specified in the contract.

March $28$: TreeHold's engineering staff complete the equipment design and it is approved by officials from Coastal.

May $18$: TreeHold completes construction of the $25$ harvesters.

May $20$: The $25$ harvesters are loaded onto TreeHold's trucks and are delivered to Coastal's operation centre in Duncan later that day.

June $2$: Coastal pays the balance owing on the contract.

Required

a$.$ Using the five$-$step model for revenue recognition, determine when and how much revenue TreeHold would be able to recognize for the year ended May $31,2020.$ Round percentages to the nearest two decimal places.

b$.$ Prepare TreeHold's required journal entries for all of the dates appearing above along with any other necessary journal entries for the contract based on your analysis in part $"$a$."$