Sandhill Engineering licensed software to oil-drilling firms for 5 years. In addition to providing the software, the company also provides consulting services and support to ensure the smooth operation of the software. The total transaction price is $462000. Based on standalone values, the company estimates the consulting services and support have a value of $141000 and the software license has a value of $321000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes O a credit to Unearned Service Revenue of $462000. O a credit to Sales Revenue for $321000 and a credit to Unearned Service Revenue of $141000. O a credit to Service Revenue of $141000. O a credit to Sales Revenue of $462000.
Sandhill Engineering licensed software to oil-drilling firms for 5 years. In addition to providing the software, the company also provides consulting services and support to ensure the smooth operation of the software. The total transaction price is $462000. Based on standalone values, the company estimates the consulting services and support have a value of $141000 and the software license has a value of $321000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes O a credit to Unearned Service Revenue of $462000. O a credit to Sales Revenue for $321000 and a credit to Unearned Service Revenue of $141000. O a credit to Service Revenue of $141000. O a credit to Sales Revenue of $462000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sandhill Engineering licensed software to oil-drilling firms for 5 years. In addition to providing the software, the company also provides
consulting services and support to ensure the smooth operation of the software. The total transaction price is $462000. Based on
standalone values, the company estimates the consulting services and support have a value of $141000 and the software license has a
value of $321000. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes
O a credit to Unearned Service Revenue of $462000.
O a credit to Sales Revenue for $321000 and a credit to Unearned Service Revenue of $141000.
a credit to Service Revenue of $141000.
O a credit to Sales Revenue of $462000.
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