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Allocating Transaction Price to Performance Obligations and Recording Sales Software Supplier Inc. sells...

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Accounting

Allocating Transaction Price to Performance Obligations and Recording Sales
Software Supplier Inc. sells to a customer a perpetual software license and post-contract customer support for a 12-month period, commencing at the time that the software is activated. Software Supplier Inc. charges $540 upfront when the software is purchased and $36 a month for 12 months, due at the end of the month. Software Supplier Inc. sells the software separately for $720 while the standalone selling price of the post-contract customer support is $360.
Note: Carry all decimals in calculations; round the final answer to the nearest dollar.
Note: If a journal entry (or a line of the journal entry) isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
a. How should the transaction price be allocated among the performance obligation(s)?
b. Prepare Software Supplier's journal entry to record sale of software to the customer and the entry for the first monthly payment.
\table[[Account Name,Dr.,Cr.],[Cash,540,0],[Deferred Revenue,0,540],[Sales Revenue,0,972],[To record sale of software.,,:.
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