Millionaire Ride Ltd. operates an online booking service for luxury car rentals around the world. Users of the company’s website booked luxury cars totalling $8.4 million in 2020. Bookings are fully paid for at the time of reservation and are fully refundable if the reservation is cancelled any time up to 20 days before the reservation date. After that date, the reservations are non-cancellable. Under the terms of the company’s listing agreements with luxury car owners, Millionaire Ride charges a fee of 10% of the total reservation and electronically transfers the balance of cash collected directly to the car owner’s bank five days before the reservation date. Of the 2020 bookings, 75% had been completed before Millionaire Ride’s December 31 year end. The balance of the bookings were still within the cancellation period.

Required

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