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Company A provides a bundled service offering to Customer B. It charges Customer B $800,000 for initial connection to its network and two ongoing services - access to the network for 1 year and 'on-call troubleshooting' advice for two years. Customer B pays the $800,000 upfront, on 1 July 2019. Company A determines that, if it were to charge a separate fee for each service if sold separately, the fee would be: Connection fee $400,000Access fee $500,000Troubleshooting $400,000 The end of Company A's reporting period is 30 June 2020. Required
Problem 1: Prepare the journal entries to record this transaction in accordance with AASB 15 "Revenue from Contracts with Customers" for 1 July 2019 and the year ended 30 June 2020, assuming Company A applies the relative fair value approach. (Show all workings).
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