On January $1,$ Year $1,$ Loud Company enters into a $2-$year contract with a customer for an unlimited talk and $5$ GB data wireless plan for $$65$ per month. The contract includes a smart phone for which the customer pays $$299.$ Loud also sells the smart phone and monthly service plan separately, charging $$649$ for the smart phone and $$65$ for the monthly service for the unlimited talk and $5$ GB data wireless plan. On July $1,$ Year $1,$ the customer realizes that she needs a text messaging plan and adds an unlimited text messaging plan for the remaining term of the contract $(18$ months$).$ The unlimited text messaging plan is priced at $$15$ per month. This is the current pricing for this plan available to all customers.

Required:

$1.$ How should Loud account for this contract modification?

$2.$ Provide Loud$$s new monthly revenue recognition journal entries.