StrongArm Software Developers Berhad shipped its accounting package to a customer on September 10, 2020. In addition to the software, StrongArm's contract requires the company to provide: (1) training to the customer's accounting staff during October of 2020 and again in January 2021 when the upgrade is released, 75% of the training hours are provided during October 2020, (2) technical product support for one year starting October 1, 2020, and (3) a major upgrade to the software early in 2021. The customer paid the total contract price of $80,000 upon receipt of the invoice on September 17, 2020. StrongArm would charge the following if these individual contract elements were sold separately:

Fair Value

Accounting package (software) $65,000

Training customer's staff $10,000

Customer support $15,000

Accounting software upgrade $10,000

Totals $100,000

Required:

(a) Prepare a journal entry to record receipt of the cash payment. (5 m)

(b) Show the amount of revenue to be recognized in 2020 and prepare the necessary journal entry. (15 m)