HealthWave Corp. is evaluating its revenue recognition practices for the year ending December 31, 20X1. The company recorded the following transactions:

• On January 1, signed a contract to provide medical software development services for $700,000, with 50% payment upfront and 50% upon completion in six months.
• By March 31, completed 50% of the project and billed the customer for the completed portion.
• By June 30, completed the remaining 50% of the project and recognized the remaining revenue.
• On December 31, provided annual support services worth $150,000, billed but not yet collected.

Required:

• Prepare the journal entries for the revenue transactions during the year.
• Calculate the total revenue recognized for the year ending December 31, 20X1.
• Prepare the accounts receivable and unearned revenue balances as of December 31, 20X1.
• Discuss the impact of the revenue recognition on the company’s financial statements and cash flow.