Assume the same facts as in E17 5 and ignore E17 6. On July 1, 2017, the customer realizes that she needs a text messaging plan and adds an unlimited text messaging plan for the remaining term of the contract ( 18 months). The unlimited text messaging plan is priced at $ 15 per month. This is the current pricing for this plan available to all customers.
Required:
1. How should Loud account for this contract modification?
2. Provide Loud’s new monthly revenue recognition journal entry.