Carla Vista Biotech enters into a licensing agreement with Pharoah Pharmaceutical for a drug under development. Carla Vista will receive a payment of $7,400,000 if the drug receives regulatory approval. Based on prior experience in the drug-approval process, Carla Vista determines it is 85% likely that the drug will gain approval and a 15% chance of denial. (a) Your answer is correct. Determine the transaction price of the arrangement for Carla Vista Biotech. Transaction price $ eTextbook and Media List of Accounts Attempts: 1 of 3 used (b) Assuming that regulatory approval was granted on December 20, 2025, and that Carla Vista received the payment from Pharoah on January 15, 2026, prepare the journal entries for Carla Vista. The license meets the criteria for point-in-time revenue recognition. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit