Circuit Fitness (CF) sells exercise equipment to fitness centers. On February 1^st, 2021, the sales manager for CF obtained a signed contract from Suburban Fitness Center (SFC) for all of the equipment for their new fitness center. The new fitness center has a projected opening date of May 1, 2021. CF will deliver the equipment on April 1, 2021.

The contract specifies that the SFC will pay $1,400,000 within on June 1, 2022.

It is estimated that the amount interest on similar projects is equal to $140,000 for the time period from when delivery is made until payment by the customer. CF has significant experience in these types of transactions and a revenue reversal is not expected to occur. CFs fiscal year is January 1- December 31.

Required:

Determine the transaction price (Step 3) following the requirements from ASC 606. Show your calculations and indicate if there is interest expense /interest revenue as a component of the price.