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Facts: On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $65 per...

Facts: On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and 5 GB data wireless plan. On July 1, 2017, the customer realizes that she needs less data in her wireless plan and downgrades to the unlimited talk and 2 GB data plan for the remaining term of the contract (18 months). The unlimited talk and 2 GB data plan is priced at $55 per month. The $55 per month is Loud's current stand-alone price for this plan that is available to all customers.


Q: On July 1, the Contract Receivable has a remaining balance of $ ??? - Why is this not either $1,170 ($65*18-months) nor is it $990 ($55*18-months). It's also not $1,340 ($55*18+($649-299), nor is it $1,520 ($65*18+($649-$299).

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