BMC has successfully built a practice that services small businesses by providing accounting related services. BMC will provide free training and initial implementation of accounting records through QuickBooks but requires a monthly subscription in order to access the account information. This training is otherwise provided for a one-time fee of $10,000. Upon subscription ($10k/month), BMC will perform all related accounting functions for the small business using QuickBooks. The subscription requires a 3 year contract. Premium Services can be purchased at a 20% discount, if included in the contract, which includes 24/7 direct hotline to senior accountants within BMC. The Premium Services are routinely sold at standalone prices of $100/hr. BMC estimates that a typical client will utilize this service on average of 40 hours a month.

1. Perform the 5 steps of Revenue Recognition assuming a client purchased the maximum package. Assume the estimate and actual hours for Premium Services has no variances.
2. Record all necessary entries for the first year of the contract