Copier Choice Corporation (CCC) is a calendar year, accrual method, C Corporation engaged in the business of selling and servicing copiers primarily to service businesses such as accounting and law firms. During the fourth quarter of 2021, CCC received the following payment:

• Service payment

CCC received in full a $375,000 fee for a 15-month service contract on 375 copiers sold by CCC in October of 2021 to a national law firm. Under the terms of the contract, CCC will provide all routine maintenance and service work on the copiers sold to the national law firm from November 1, 2021 through January 31, 2023.

Please answer the following questions

1. What amount of service income should CCC report in 2021, 2022, and 2023 on its financial accounting (GAAP) income statements? Please show your work and explain your calculations. (4 points)

2. What amount of service income should CCC report in 2021, 2022, and 2023 on its federal tax return? Please show your work and explain your calculations.