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A company sells equipment and service contracts. When purchased separately, the equipment costs $4,365 and...

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Accounting

A company sells equipment and service contracts. When purchased separately, the equipment costs $4,365 and a four-year service contract costs $8,057. When purchased together, the equipment cost is discounted 22% of the cost if purchased separately. They always deliver equipment the day it is sold.
How much revenue does the firm recognize from the first year of the service contract when it is sold together with equipment?

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