for Question 1: round the answer to the nearest cent.

On Janusry 1, 2019, Loud Company enters into a 2 year contract with a customer for an unlimited tak and 5 GB data wireless plan for 566 per month. The contract includes a smartphone for which the customer pays \$299. Loud also sells the smartphone and monthly service plan separately, charging \$649 for the smarlphone and \$65 for the monthly service for the unlimited talk and 5GB data wireless plan. On July 1,2019, the customer realizes that she needs less data in her wireless plan and downgrades to the unilmited tak and 2 GB data plan for the remaining term of the contract (18 months). The unlimited talk and 2GB data plan is priced at $55 por month. The $55 per month is Loud's curtent stand-alone price tor this plan that is available to all customers. Aequired: 1. How should Loud account for this contract modilication? 2. Provide Loud's new monthly revenue recognition joumal entry. 1. How should Loud account for this contract modification? Acditionai instrielian The contract modification add goods or services to the arrangelnent, therefore, this modification be treated as a separate contract. However, to determine the appropriate accounting for the moditication, the entily has to assess whether the remaining goods and services (18 months of service) are goods and services already provided to the customer (handset and 6 manths of services). On July 1, the contract receivable has a remaining balance of As a result, the entity has to allocate to the remaining 18 months of service, or per month. 2. Prepare the journal entry to record the cash received for the monthly service plan on July 1 . General Journal Instructions