Hodge Technology Ltd signs a contract on 1 July 2020 with PNG Telecom Ltd to provide and service switching equipment for a new exchange. The contract provides for 4 annual payments (in arreas) of $100,000 on 30 June each year. If sold separately, the equipment would have a sale price of $300,000 and 4 year service contract would cost $100,000. The equipment is shipped immediately and if PNG Telecom borrowed the money from the local bank the interest rate would be 8% which indicates low credit risk. Hodge has a 30 June year end.

Prepare the journal entries for hodge to record on:

1 July 2020

30 June 2021