1. Assume that TSA enters into a five-year software arrangement on January 1, 1999, whereby the customer is contractually committed to make an initial payment of $100,000 on January 1, 1999 and $2,000 per month at the end of each month for five years. Assume TSA charges an implicit interest rate of 12%. Provide journal entries for the first two years of the contract. Explain in your own words and provide citation from ASC 606.
2. Assume on January 1, 2000, TSA sells its remaining receivable from question 13 above to a bank on a non-recourse basis for $65,000. Provide the journal entry for the sale of this receivable, assuming the conditions for a sale are met. Explain in your own words and provide citation from ASC 606.