Colorado Inc. often sponsors professional tennis players in an attempt to improve its brand image. In Jan 2020, it has a three-year agreement with a tennis player who is currently ranked in the world’s top ten players. The agreement is that the player receives a signing bonus of $20,000 and earns an annual amount of $50,000, paid at the end of each year for three years, provided that the player has competed in all the specified tournaments for each year. In return, the player is required to wear advertising logos on tennis apparel, play a specified number of tournaments and attend photo/film sessions for advertising purposes. The different payments are not interrelated.

Required:

You need to prepare:
1. How you should recognize the transaction above. Your argument must be supported with relevant accounting standards. 

2. any necessary journal entries in 2021 - 2022 assuming the discount rate is 5% each year.