1. Entity A is operated as an internet cafe, which locates in Hung Hom. It opens 24/7 (24 hours a day and 7 days a week). Recently, it enters into a short-term contract with Entity B, the largest local internet game server-workstation service provider on 1 January 2019. The contract period is 4 months from 1 February 2019 to 31 May 2019. On 31 January 2019, the internet game server and the workstations are delivered to Entity A.

   This contract includes the provision of one electronic game server with ten workstations and a 24/7 technical supporting service to Entity A over the contract period. According to the contract terms, Entity A is not required to return the game server and the ten workstations back to Entity B at the contract end. Entity A pays a monthly fixed fee of $68,800 to Entity B at every month-end.

   Entity B sells the same internet game server with ten workstations to other customers alone for $360,000. The original cost of them is $235,000. In addition, it also provides the same 24/7 technical supporting service to other customers alone for $10,000 per month.

   REQUIRED:

   Prepare journal entries of the seller on 1 January 2019, 31 January 2019, 1 February 2019, 28 February 2019, 1 March 2019, 31 March 2019, 1 April 2019, 30 April 2019, 1 May 2019 and 31 May 2019 in accordance with the relevant accounting standards.

   ACCOUNT NAMES FOR INPUT:

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

   | Revenue (Technical support) | Cost of sales (Technical support) | Inventory (Technical support) |

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

   | Contract asset (Technical support) | Contract liability (Technical support) |

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

   ANSWERS:

   Journal Entries:

   Date	Account Name	Debit ($)	Credit ($)	Hints For Sequence
   1-Jan-19	Blank 1	Blank 2
   	Blank 3		Blank 4
   31-Jan-19	Blank 5	Blank 6
   	Blank 7	Blank 8		Judge Dr/Cr side
   	Blank 9	Blank 10		Judge Dr/Cr side
   	Blank 11	Blank 12		Judge Dr/Cr side
   1-Feb-19	Blank 13	Blank 14
   	Blank 15	Blank 16		An asset. Judge Dr/Cr side
   	Blank 17	Blank 18		Judge Dr/Cr side
   28-Feb-19	Blank 19	Blank 20
   	Blank 21	Blank 22		Judge Dr/Cr side
   28-Feb-19	Blank 23	Blank 24		A liability. Judge Dr/Cr side
   	Blank 25	Blank 26		Judge Dr/Cr side
   1-Mar-19	Blank 27	Blank 28
   	Blank 29	Blank 30		An asset. Judge Dr/Cr side
   	Blank 31	Blank 32		Judge Dr/Cr side
   31-Mar-19	Blank 33	Blank 34
   	Blank 35	Blank 36		Judge Dr/Cr side
   31-Mar-19	Blank 37	Blank 38		A liability. Judge Dr/Cr side
   	Blank 39	Blank 40		Judge Dr/Cr side
   1-Apr-19	Blank 41	Blank 42
   	Blank 43	Blank 44		An asset. Judge Dr/Cr side
   	Blank 45	Blank 46		Judge Dr/Cr side
   30-Apr-19	Blank 47	Blank 48
   	Blank 49	Blank 50		Judge Dr/Cr side
   30-Apr-19	Blank 51	Blank 52		A liability. Judge Dr/Cr side
   	Blank 53	Blank 54		Judge Dr/Cr side
   1-May-19	Blank 55	Blank 56
   	Blank 57	Blank 58		An asset. Judge Dr/Cr side
   	Blank 59	Blank 60		Judge Dr/Cr side
   31-May-19	Blank 61	Blank 62
   	Blank 63	Blank 64		Judge Dr/Cr side
   31-May-19	Blank 65	Blank 66		A liability. Judge Dr/Cr side
   	Blank 67	Blank 68		Judge Dr/Cr side