On July 1, 2020, ABC Co. grants a franchisee the right to sell ABC Co.’s products in a specific market over a period of 5 years. The franchise contract required an upfront fee of 1,500,000, which does...

On July 1, 2020, ABC Co. grants a franchisee the right to sell ABC Co.’s products in a specific market over a period of 5 years. The franchise contract required an upfront fee of 1,500,000, which does not include P250,000 for equipment that ABC Co. will provide to the franchisee. The amount reflects the stand-alone selling price of equipment. In addition, the franchisee will pay a 10% sales-based royalty. ABC Co. has granted similar rights to other franchisees in other locations. ABC Co. regularly undertakes activities that promote the brand name nationally. ABC delivers the equipment to the franchisee on July2, 2020. The franchisee starts selling products on September 1, 2020 and reports total sales of P1,000,000 for the year.
How much total revenue is recognized from contract in 2020?