Recording Long$-$ Term Construction: Recognize Revenue at a Point in Time and Over Time

Watson Construction Company contracted to build a plant for $$750,000.$ Construction started in January of

Year $1$ and was completed in November of Year $2.$ Watson uses the cost$-$to$-$cost method to measure the

completion of its performance obligations. Data relating to the contract follow.

Required

Point in Time

b$.$ Provide the Year $1$ and Year $2$ journal entries for Watson assuming revenue is recognized over time. Provide

entries for $(1)$ construction costs incurred, $(2)$ progress billings, $(3)$ cash collections, $(4)$ revenues and expenses,

and $(5)$ to close out accounts upon completion of the contract.

$-$Note: Use the result EXACTLY as displayed above in the calculations below.

$-$Note: If a journal entry isn't required on any of the dates shown, select $"$N$/$A$$debit$"$ and $"$N$/$A$$credit$"$ as the

account names and leave the Dr$.$ and Cr$.$ answers blank $($zero$).$