. ue Recognition Crankshaft's products range from simple automated machinery to complex systems containing numer E19.13 (403) (Allocate Transaction Price) Crankshaft Company manufactures equipment. ous components. Unit selling prices range from $200,000 to $1,500,000 and are quoted inclusive of instal- lation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform specifications. Crankshaft has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Crankshaft for a price of $1,000,000 and contracts with Crankshaft to install the equipment. Crankshaft charges the same price for the equipment irrespec tive of whether it does the installation or not. Using market data, Crankshaft determines instala tion service is estimated to have a standalone selling price of $50,000. The cost of the equipment is Winkerbean is obligated to pay Crankshaft the $1,000,000 upon the delivery and installation of the equipment Crankshaft delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately, Instructions a. How should the transaction price of $1,000,000 be allocated among the service obligations? b. Prepare the journal entries for Crankshaft for this revenue arrangement on June 1, 2020 and Septem- ber 30, 2020, assuming Crankshaft receives payment when installation is completed. $600,000 n1