P $65$

Variable consideration$$LO$63,$ LO$66$On January $1,$ Revis Consulting entered into a contract to

complete a cost reduction program for Green Financial over a

six$-$month period. Revis will receive $$20,000$ from Green at the end

of each month. If total cost savings reach a specific target, Revis

will receive an additional $$10,000$ from Green at the end of the

contract, but if total cost savings fall short, Revis will refund

$$10,000$ to Green. Revis estimates an $80\%$ chance that cost savings

will reach the target and calculates the contract price based on

the expected value of future payments to be received.Required:Prepare the following journal entries for Revis:Prepare the journal entry on January $31$ to record the collection

of cash and recognition of the first month$$s revenue.Assuming total cost savings exceed target, prepare the journal

entry on June $30$ to record receipt of the bonus.Assuming total cost savings fall short of target, prepare the

journal entry on June $30$ to record payment of the penalty.