Question
On December 1, 2020, Santigo Enterprises signed a contract with DIY Depot to supply it with toys for the next five years beginning January 2021.
On December 1, 2020, Santigo Enterprises signed a contract with DIY Depot to supply it with toys for the next five years beginning January 2021. Under the terms of the contract, Santigo Enterprises would produce and deliver toys to DIY Depot and DIY Depot would pay Santigo Enterprises a fixed amount of $1 million for the five-year contract. Santigo Enterprises requested that DIY Depot pay 50% of this amount upfront to help defray the costs of producing the toys. Santigo Enterprises has recorded this $500,000 as revenues in 2020. What are the correct journal entries under IFRS?
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