Assume the same facts as in E17 5. On July 1, 2017, the customer realizes that she needs less data in her wireless plan and downgrades to the unlimited talk and 2 GB data plan for the remaining term of the contract ( 18 months). The unlimited talk and 2 GB data plan is priced at $ 55 per month. The $ 55 per month is Loud’s current stand alone price for this plan that is available to all customers.
Required:
1. How should Loud account for this contract modification?
2. Provide Loud’s new monthly revenue recognition journal entry.