Assume the facts given in BE6.36 for Martin Corp. Prepare the December 31, 2021 yearend journal entry to record any loss from the contract assuming Martin uses the completed-contract method.

BE6.36

Inexperienced construction company Martin Corp. signed a risky non-cancellable contract to build a research facility at a fixed contract amount of $2 million. The work began in early 2020 and Martin incurred costs of $900,000. At December 31, 2020, the estimated future costs to complete the project totalled $900,000. During 2021, Martin ran into trouble with weather conditions and incurred the expected costs of $900,000 and estimated that it would need to spend an additional $300,000 to complete the project. During 2022, Martin reluctantly completed the project, incurring further costs of $350,000. Calculate the amount of gross profit or loss that should be recognized each year under the percentage-of-completion method and prepare the December 31, 2021 year-end journal entry to record costs, revenues, expenses, and losses from the contract. Round the percent complete to four decimal places.