As described above, on January 1, 20X0 (the grant date), $30 million of sales were

probable for year 5. During years 1, 2, and 3, $30 million of sales for year 5 remained

probable. At the beginning of year 4, management determines that it is probable that only

$22 million of sales will occur for year 5. What are the proper accounting treatment and

journal entries for each year?