(Recording journal entries for recording revenue at different critical events, LO 1, 2,5) Risteen Telephone Services Ltd. (Risteen) designs and installs telephone systems for commercial customers. For example, in December 2004, Risteen signed a contract with Yarm Telemarketing Systems Ltd. (Yarm) to design and install a phone system for Yarm’s new call centre in New Brunswick. The following events pertain to the contract with Yarm:

December 13, 2004: The contract between Risteen and Yarm is signed. Yarm will pay $500,000 for the system and the system will cost Risteen $300,000 to design, produce, and install. The contract provides an 18-month warranty to make any repairs or adjustments required. Yarm will pay within 90 days of completion of the installation of the system.

October 15, 2005: Installation of the system is completed.

December 12, 2005: Warranty work costing $15,000 is performed.

January 8, 2006: Risteen receives payment in full from Yarm.

April 15, 2006: Warranty expires.

Prepare the journal entries required for the above events assuming that:

Required:

Revenue is recognized when the contract is signed.

Revenue is recognized when installation of the system is complete.

c. Revenue is recognized when cash is collected.

d. Revenue is recognized when the warranty period expires.