Easywrite Software Company shipped software to a customer on July 1, 2018. The arrangement with the customer also requires the company to provide technical support over the next 12 months and to ship an expected software upgrade on January 1, 2019. The total contract price is $243,000, and Easywrite estimates that the individual fair values of the components of the arrangement if sold separately would be as follows:

Software .................................... $210,000

Technical support ..........................30,000

Upgrade .....................................30,000

Required:

1. Determine the timing of revenue recognition for the $243,000.

2. Assume that the $243,000 contract price was paid on July 1, 2018. Prepare a journal entry to record the cash receipt. Disregard the cost of the items sold.