Recording Long-Term Construction: Recognize Revenue at a Point in Time and Over Time Watson Construction Company contracted to build a plant for $500,000. Construction started in January of Year 1 and was completed in November of Year 2. Watson uses the cost-to-cost method to measure the completion of its performance obligations. Data relating to the contract follow. As of December 31 Costs incurred Year 1 Year 2 $290,000 $120,000 Estimated costs to complete 125,000 Billings Cash collections 270,000 230,000 250,000 250,000 Required Point in Time Over Time b. Provide the Year 1 and Year 2 journal entries for Watson assuming revenue is recognized over time. Provide entries for (1) construction costs incurred, (2) progress billings, (3) cash collections, (4) revenues and expenses, and (5) to close out accounts upon completion of the contract. Percent Complete Numerator Denominator Result At the end of Year 1 $ 0 $ 0 = %