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Prepare the journal entries to record the development costs

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Question - On July 1, 2021, Santos Software began developing a financial planning software program. Technological feasibility was established on February 28, 2022, and the program was available for release on April 30, 2022. Development costs were incurred as follows:

$7,200,000 (July 1 through December 31, 2021)

$2,100,000 (January 1 through February 28, 2022

$2,500,000 (March 1 through April 30, 2022)

Santos expects a useful life of five years for the software and total revenues of $9,000,000 during that time. During 2022, revenue of $3,000,000 was recognized.

Required - Prepare the journal entries to record the development costs in 2021 and 2022.

Reference no: EM133180195

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