On December 31, year 1, Mill Co. sold construction equipment
to Drew, Inc. for $1,800,000. The equipment had a carrying
amount of $1,200,000. Drew paid $300,000 cash on December
31, year 1, and signed a $1,500,000 note bearing interest at
10%, payable in five annual installments of $300,000. Mill appropriately
accounts for the sale under the installment method.
On December 31, year 2, Drew paid $300,000 principal and
$150,000 interest. For the year ended December 31, year 2, what
total amount of revenue should Mill recognize from the construction
equipment sale and financing?