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During 2020, Ontario Enterprises Ltd., a private entity, incurred $4.7 million in costs to develop a new software product. Of this amount, $1.8 million was spent before the company determined that the product was technologically and financially feasible. The new software was completed by December 31, 2020, and will be marketed to third parties. Ontario Enterprises expects a useful life of eight years for this product, with total revenues of $12 million. During 2021, Ontario Enterprises realized revenues of $2.7 million from sales of the new software.

Required:

1. Assuming Ontario Enterprises reports under ASPE, prepare the journal entries that are required in 2020 to record the above. (Hint: Consider all reporting options)
2. Prepare the entry to record amortization at December 31, 2021, assuming a straightline method of amortization.
3. At what amount should the software costs be reported in the December 31, 2021, statement of financial position?