Moon Company licenses accounting software and provides training and support, both separately and as bundled service packages. It charges $150,000 for licensing and $30,000 per year for training and support. However, Moon offers discounts ranging from 10% to 20% for customers who contract for both. On July 1, 2018, Moon licenses the software to Sun Company under an agreement that includes training and support as well as updates to the software for the duration of the three-year contract. The total contract price is $200,000, and Sun pays half that amount at signing. The contract stipulates that the remaining half cannot be billed until Sun has had six months to assess both the softwares continued suitability for the companys needs and Suns satisfaction with the quality of Moons training and support services.

Required prepare the journal entry(s), if any, that Moon should record under FASB ASC 606 on July 1, 2018, briefly explaining your rationale:

The software is functional at the time that Moon transfers the license to Sun and is not expected to change substantially throughout the license period. Updates to the software ordinarily relate to security and refinements. While they improve the software, they do not alter its basic functionality. These updates are typically made every 18 months or so, and the next one is scheduled for June of 2019. Although updates are not sold separately from the software, Moon believes that their value is approximately $10,000. Sun is a repeat customer and so is experienced with the software. Therefore, Moon expects Suns usage of the training and support services will remain fairly steady throughout the three-year contract period.