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Homework answers / question archive / Maipo Corporation sells computer software to Me Bong, Mr

Maipo Corporation sells computer software to Me Bong, Mr


Maipo Corporation sells computer software to Me Bong, Mr. Bong shall P750.000 upfront fee in exchange for the following performance obogations (1) equipment (2) Initial training and (3) five years right over the computer software. The standalone selling price of the equipment is P380.000 The stand-alone selling price of the initial training is P280.000. The entity estimates the standalone seling price of the five year richt over the computer software using the residual approach On February 1.20x1. Maipo receive the P150.000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1. Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contractare distinct Req. 1 Assume Mr. Bong has the right use the intellectual property, the journal entry on February 1, 20x1 will include: Debit Cash of P750,000 Credit License Revenue - Software of P100,000 Debit Notes receivable of P600.000 Credit Unearned interest Income of P100.000

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