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

How should MU recognize revenue related to the KH purchase of the titanium blades during January based on ASC 605 guidance? Suggest journal entries and disclosures.

How should MU recognize revenue related to the KH purchase of the titanium blades during January based on ASC 606 guidance? Suggest journal entries and disclosures.