On January $1,$ ITA separately entered into a non$-$exclusive licensing agreement with ABB. ThOn January $1,$ ITA separately entered into a non$-$exclusive licensing agreement with ABB. The licensing agreement allows ABB the right to use the ITA trademarked logo on aprons and chef hats for a two$-$year period. ITA also plans to spend $$1$ million during the two$-$year period on advertising its products with the logo$.$ The rights and terms granted by ITA to ABB are similar to those granted by ITA in licensing agreements with various other companies. ABB paid ITA a one$-$time fee of $$12,000$ on January $1$ at the inception of the two$-$year licensing period.

Requirements

$$ Record all initial accounting entries for ITA for the month of January based on the current guidance on revenue recognition in ASC $605.$ Include references to the guidance to support your proposed accounting. Show any calculations you make to support your journal entries.

Review ASC $606-10-55-54$ through $64.$ Prepare a detailed explanation of each of the five steps of revenue recognition. Record all initial accounting entries for ITA for the month of January based on the new guidance on revenue recognition in ASC $606.$ Include references to the guidance to support your proposed accounting. Show any calculations you make to support your journal entries.

$$ What, if anything, is the difference in revenue recognized for the month of January under ASC $605$ and ASC $606?$e licensing agreement allows ABB the right to use the ITA trademarked logo on aprons and chef hats for a two$-$year period. ITA also plans to spend $$1$ million during the two$-$year period on advertising its products with the logo$.$ The rights and terms granted by ITA to ABB are similar to those granted by ITA in licensing agreements with various other companies. ABB paid ITA a one$-$time fee of $$12,000$ on January $1$ at the inception of the two$-$year licensing period.

Requirements

$$ Record all initial accounting entries for ITA for the month of January based on the current guidance on revenue recognition in ASC $605.$ Include references to the guidance to support your proposed accounting. Show any calculations you make to support your journal entries.

Review ASC $606-10-55-54$ through $64.$ Prepare a detailed explanation of each of the five steps of revenue recognition. Record all initial accounting entries for ITA for the month of January based on the new guidance on revenue recognition in ASC $606.$ Include references to the guidance to support your proposed accounting. Show any calculations you make to support your journal entries.

$$ What, if anything, is the difference in revenue recognized for the month of January under ASC $605$ and ASC $606?$