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Dodgy Stories has acquired the publishers' rights to a book from an author. It has sold the rights to a newspaper group for serialisation over the next few weeks on 30 November 20X1. Under the terms of the contract the newspaper will serialise the book in weekly instalments in 20X2 and 20X3. The newspaper has paid a fixed fee of $750,000. Which of the following options describes an acceptable treatment of the $750,000 by AB? A. Treat $750,000 as prepaid income, recognise in the income statement in 20X2 and 20X3 as the serialisation proceeds. B. Recognise $750,000 in equal instalments for 20X1, 20X2 and 20X3. C. Defer recognition until the serialisation is complete in 20X3 by the customer. D. Treat $750,000 as income in 20X1 in full. |