Grant 9

9. As a measure to improve unemployment rate in certain parts of the country, government indicated that it would subsidise the salaries of 5 employees of Bula Ltd located in the preferred area, provided that the company recruited the 5 employees from that rural area and employed them for at least 3 years. The total subsidy amounted to P200 000 (receivable in year 1, 2019). If any of the conditions were not met, the total subsidy would have to be repaid. The employees started working at the beginning of 2019, and their annual remuneration amounted to P72 000 per employee. It was expected that their remuneration would increase by 5% p.a. Due to misconduct, employment of one employee was terminated on 1 January 2021 and Bula was required to repay the full subsidy. REQUIRED: Prepare journal entries to record the information set out above in the accounting records of Bula for the years ended 31 December 2019, 2020 and 2021 on the assumption that Bula recognizes grant as a credit to related expenses