Preston Guide Service provides guided 15 day hiking tours throughout the Rocky Mountains. Summer Tours hires Preston to lead various tours that Summer sells. Preston receives $1,000 per tour day, and shortly after the end of each month Preston learns whether it will receive a $100 bonus per tour day it guided during the previous month if its service during that month received an average evaluation of excellent by Summer customers. The $1,000 per day and any bonus due are paid in one lump payment shortly after the end of each month.

On July 1, based on prior experience, Preston estimated there is a 30% chance it will earn the bonus for July tours. It guided a total of 10 days from July 1July 15.

On July 16, based on Prestons view that it had provided excellent service during the first part of the month, Preston revised its estimate to an 80% chance it would earn the bonus for July tours. Preston also guided customers for 15 days from July 16July 31.

On August 5, Preston learned it did not receive an average evaluation of excellent for its July tours, so it would not receive any bonus for July, and received all payment due for the July tours.

Preston bases estimates of variable consideration on the most likely amount it expects to receive.

Required:

1. Prepare Prestons July 15 journal entry to record revenue for tours given from July 1July 15.
2. Prepare Prestons July 31 journal entry to record revenue for tours given from July 16July 31.
3. Prepare Prestons August 5 journal entry to record any necessary adjustments to revenue and receipt of payment from Summer.