Wind Technology, Inc., is an independent research laboratory that undertakes contractual research for a variety of corporate and governmental clients. In January 2014, scientists at Wind Technology began work on a number of projects involving wind-power generation. During 2014, costs incurred in these efforts amounted to \($363,000\). In May 2015, promising results emerged and were reported to the U.S. Department of Energy. Development costs incurred in 2015 through the end of May totaled \($204,000\).

At this point, Wind Technology tried to secure a government contract to support the remainder of the research effort. The Department of Energy (DOE) was reluctant to commit substantial sums until further tests had been completed. Nonetheless, to ensure that it retained access to the new technology, the DOE gave Wind Technology a seed grant of \($50,000\) to help support continuation of the studies. This grant carried a stipulation that the DOE would retain the right to acquire the results, patents, and copyrights from the research any time on or before December 31, 2016, for \($2.4\) million.

Further testing proved favorable, although additional development costs incurred in 2015 amounted to \($325,000\) and to \($210,000\) in 2016. On December 28, 2016, the DOE exercised its right and agreed to purchase the results, patents, and copyrights from the lab. As previously agreed, the DOE paid Wind Technology \($300,000\) immediately, with the remainder of the contract price payable in seven equal annual installments beginning on December 31, 2017, through December 31, 2023. On March 1, 2017, Wind Technology delivered all scientific and legal documents, test results, and samples to the DOE offices in Washington, D.C.

Required

Evaluate the facts and determine when Wind Technology, Inc., should recognize the various revenue streams associated with its work on this project:

(a) the \($2.4\) million contract proceeds;

(b) the \($50,000\) seed grant; and

(c) the interest implicit in the seven-year deferred payment (assume a discount rate of ten percent).