Sandhill Engineering licensed software to oil-drilling firms for 5 years. In addition to providing the software, the company also provides consulting services and support to ensure the smooth operation of the software. The total transaction price is $462000. Based on standalone values, the company estimates the consulting services and support have a value of $141000 and the software license has a value of $321000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes O a credit to Unearned Service Revenue of $462000. O a credit to Sales Revenue for $321000 and a credit to Unearned Service Revenue of $141000. O a credit to Service Revenue of $141000. O a credit to Sales Revenue of $462000.

Sandhill Engineering licensed software to oil-drilling firms for 5 years. In addition to providing the software, the company also provides consulting services and support to ensure the smooth operation of the software. The total transaction price is $462000. Based on standalone values, the company estimates the consulting services and support have a value of $141000 and the software license has a value of $321000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes O a credit to Unearned Service Revenue of $462000. O a credit to Sales Revenue for $321000 and a credit to Unearned Service Revenue of $141000. O a credit to Service Revenue of $141000. O a credit to Sales Revenue of $462000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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