On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and 5 GB data wireless plan. On July 1, 2017, the customer realizes that she needs less data in her wireless plan and downgrades to the unlimited talk and 2 GB data plan for the remaining term of the contract (18 months). The unlimited talk and 2 GB data plan is priced at $55 per month. The $55 per month is Loud's current stand-alone price for this plan that is available to all customers.

Required:

1. How should Loud account for this contract modification?

specifically : On July 1, the contract receivable has a remaining balance of $_______ .As a result, the entity has $________ to allocate to the remaining 18 months of service, or $__________ per month.

2. Provide Loud's new monthly revenue recognition journal entry.

It is a 3-lined journal entry. I know the correct account titles and whether they are debits or credits, but now the correct amount for each one.

These are the correct account titles:

Jul. 1 (debit) Cash

(debit) Cash

(credit) Sales Revenue

I'd really appreciate any help you can give me.