Crankshaft Company manufactures equipment. Crankshaft's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Crankshaft has the following arrangement with Winkerbean Inc. - Winkerbean purchases equipment from Crankshaft for a price of $1,000,000 and contracts with Crankshaft to install the equipment. - The cost of the equipment to Crankshaft is $600,000. - Crankshaft charges the same price for the equipment irrespective of whether it does the installation or not. - Using market data, Crankshaft determines installation service is estimated to have a standalone selling price of $50,000 and the standalone selling price for the equipment is $1,000,000. \#7 cont'd - Winkerbean is obligated to pay Crankshaft the $1,000,000 upon the delivery and installation of the equipment. - Crankshaft delivers the equipment on June 1, 2020 and completes the installation of the equipment on September 30,2020 . The equipment has a useful life of 10 years. - Crankshaft receives the payment from Winkerbean when the installation is complete. Instructions - Determine the performance obligation(s). - Determine the transaction price. - If applicable, allocate the transaction price to the performance obligations. - Prepare the journal entries to record the above, including the recognition of revenue