Novotna Ltd. is a public company that manufactures and sells heavy equipment such as cranes and provides service contracts for the maintenance of the equipment. Novotnas customers can purchase a crane or service contract separately, but the company also offers a crane with a service contract as a package. On June 1, 2020, Gibson Ltd. purchased a crane and service package from Novotna. The contract is for $379,000 and includes the crane and 3 years of maintenance services once the crane is delivered. The crane that was purchased by Gibson would normally sell for $332,920 and 3 years of maintenance services would be valued at $73,080 if purchased separately. The crane had a manufacturing cost of $264,000. Novotnas management expects the crane to be delivered by November 1, 2020. The maintenance services are expected to be provided evenly for 3 years after the delivery of the crane. The contract requires Gibson to make a $152,840 payment to Novotna within 30 days of signing the contract and then $152,840 on delivery with the balance to be paid annually over 3 years once the crane is delivered on November 1, 2020, starting November 1, 2021. Gibson has secured financing to pay for the crane system and so Novotnas management has no concerns related to collectability.

Assuming that Novotna provides the goods and services as and when expected under the contract and Gibson makes its payments as required, determine when and how much revenue Novotna would be able to recognize in each of the first four fiscal years ending December 31 (2020, 2021, 2022, 2023) of the contract. (Round answers to 0 decimal places, e.g. 125.)

		Sales revenue		Service revenue
2020		$ 310,780		$ 68,220
2021		$		$ 22,740
2022		$		$ 22,740
2023		$		$ 18,950

Based on your analysis in part a, prepare the required journal entries for the contract.

Account Titles and Explanation Debit Credit ch Date 2020 Nov. 1 (To record sales revenue) (To record cost of goods sold) 2021 (To record service revenue) Account Titles and Explanation Debit Credit ch Date 2020 Nov. 1 (To record sales revenue) (To record cost of goods sold) 2021 (To record service revenue)