On July 1, Wiggins Associates enters into a contract to provide consulting services to Pennsylvania University (PU). The contract is anticipated to last four months and is intended to achieve significant cost savings at the university. The contract stipulates that PU will pay Wiggins $31,000 at the end of each month, and, if total cost savings reach a specific target, PU will pay an additional $26,000 to Wiggins at the end of the contract. Wiggins estimates a 80% chance that cost savings will reach the target.

journal entry for the first month of the contract?

Assuming total cost savings exceed the target, prepare the journal entry, if any, on October 31 to record receipt of the $26,000 bonus (ignore the normal October payment of $31,000). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)