On October 1, 2018, the Marshall Company sold a large piece of machinery to the Hammond Construction Company for $80,000. The cost of the machine was $40,000. Hammond made a down payment of $10,000 and agreed to pay the remaining balance in seven equal monthly installments of $10,000, plus interest at 12% on the unpaid balance, beginning November 1.

Required: Identify three alternative methods for recognizing revenue and costs for the situation. Discuss the circumstances under which each of the three methods would be used.