1. prepare the journal entries for Tucson in 2005 and 2006 related to this service contract.
2. prepare the journal entries for Tucson in 2007 related to the modified service contract.
3. repeat the requirements for number 2, assuming Tucson and wigo agree on a revised set of services (fewer bookkeeping services but more tax services) in the extended contract period and the modification results in a separate performance obligation.

XXVIII - Contract Modification Tucson Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 20x5, Tucson entered in a 3-year service contract with Wigo Tech. Wigo promises to pay P20,000 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to P16,000. In addition; Wigo agrees to pay an additional P40,000 at the beginning of the third year to cover the contract for 3 additional years (i.e, 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract. VOLUME I | Advanced Financial Accounting - (A Comprehensive & Procedural Approach)