Beach Life Ltd. operates an online booking service restricted to beachfront properties around the world. Users of the company’s website booked beach rentals totalling $7.8 million in 2020. Bookings are fully paid for at the time of reservation and are 50% refundable if the reservation is cancelled any time up to 21 days before the reservation date. After that date, the reservations are non-cancellable.
Under the terms of the company’s listing agreements with property owners, Beach Life charges a fee of 12% of the total reservation and electronically transfers the balance of cash collected directly to the property owner’s bank five days before the reservation date. Of the 2020 bookings, 90% had been completed before Beach Life’s December 31 year end. The balance was still within the cancellation period.

Required
Determine how much revenue Beach Life would be able to recognize in 2020. Use the five-step model for revenue recognition in preparing your response.