Easywrite Software Company shipped software to a customer on July 1, 2013. The arrangement with the customer also requires the company to provide technical support over the next 12 months and to ship an expected software upgrade on January 1, 2014. Assuming that Easywrite sold each of the components separately for the amounts listed, the total contract price is $258,000, and Easywrite estimates that the individual fair values of the components of the arrangement if sold separately would be:

Software $ 210,000

Technical support 20,000

Upgrade 20,000 Required:

1. Determine the timing and amount of revenue recognition for the $258,000.

2. Assume that the $258,000 contract price was paid on July 1, 2013.

Prepare a journal entry to record the cash receipt. Do not worry about the cost of the items sold. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)