Entity A is operated as an internet cafe. It opens 24/7 (24 hours a day and 7 days a week) every day.

Recently, it entered into a short-term contract with Entity B which is an electronic game server-workstation service provider on 1 January 2021 for providing network game solution. The contract period was 6 months from 1 February 2021 to 31 July 2021. On 31 January 2021, Entity B delivered one game-server with ten game-workstations to Entity A.

The terms of the contract include the provision of one game-server with ten game-workstations, a 24/7 tech-nology supporting service and a 9/7 training service to Entity A over the contract period.

Entity A is not required to return the game-server and the workstations back to Entity B at the contract end.

Entity A is required to pay a monthly fixed fee of $96,000 to Entity B at every month-end.

Entity B sells the same set of game-server and workstations to other customers for $270,000. The original cost of them is $156,000.

Entity B also provides the same 24/7 tech-nical supporting service and 9/7 training service to other customers alone for $2,000 and $3,000 per month respectively.

The end of the reporting period is 31 December.

REQUIRED:

According to relevant accounting standards, prepare journal entries to recognise the transactions of Entity B from 1 January 2021 to 28 February 2021, 1 May 2021, 31 May 2021, 1 July 2021 and 31 July 2021.

ACCOUNTS FOR INPUT:

| Revenue (Server-workstations) | Cost of sales (Server-workstations) | Inventory (Server-workstations) |

| Revenue (Techni-cal support) | Cost of sales (Tech-nical support) | Inventory (Tech-nical support) |

| Revenue (Training) | Cost of sales (Training) | Inventory (Training) |

| Contract asset (Server-workstations) | Contract liability (Server-workstations) |

| Contract asset (Tech- nical support) | Contract liability (Tech- nical support) |

| Contract asset (Training) | Contract liability (Training) |

| Payable | Receivable | Bank | Interest expense | Interest revenue | No entry |

| Retained earnings | Share capital |

ANSWERS:

Journal Entries:

Date	Account Name	Debit ($)	Credit ($)	Hints For Sequence
1-Jan-21				-
				-
31-Jan-21				-
				-
				-
				-
1-Feb-21				-
				-
				Related to Tech- nical Support
				Related to Training
28-Feb-21				-
				-
28-Feb-21				Related to Tech- nical Support
				-
28-Feb-21				Related to Training
				-
1-May-21				-
				-
				Related to Tech- nical Support
				Related to Training
31-May-21				-
				-
31-May-21				Related to Tec- hnical Support
				-
31-May-21				Related to Training
				-
1-Jul-21				-
				-
				Related to Tech- nical Support
				Related to Training
31-Jul-21				-
				-
31-Jul-21				Related to Tech- nical Support
				-
31-Jul-21				Related to Training
				-