Falcon Ltd is a software company and in on 1st of Oct 2020 it sold its software product to Mira Ltd for a total of 600,000 which includes the provision of support service for the next 3 years.

Without a support service, a software is sold to other customers at 460,000. Support service can be provided separately at 80,000 per year.

Required: Explain how this transaction should be accounted for in financial statements for year ending 31 Dec 2020.

Note: Ignore any discounting.