on january 1 abc consulting entered into a contract to complete a cost reduction program for xyz financial over a six-month period. abc will receive$30000 from xyz at the end of each month. If total cost savings reach a specific target, abc will receive an additional %15000 from XYZ at the end of the contract, but if total cost savings fall short, ABC will refund $15000 to XYZ. ABC estimates a 60% chance that cost savings will reach the taret and calculates the contract price based on the expected value of future payments to be received.

Required.

1. Prepare the journal entry on January31 to record the collection of cash and recognition of the first month's revenue

2. Assuming total cost savings exceed target, prepare the journal entry on June 30 to record receipt of the bonus

3.Assuming total cost savings fall short of target, prepare the journal entry on June 30 to record payment of the penalty