What's the rationale for using the $7200 value in the last journal entry instead of 10300?

Bridgeport Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 2020, Bridgeport entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $10,300 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 contrac is modified and the fee for the third year of services is reduced to $8,200. In addition, Walleye agrees to pay an additional $20,600 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. Prepare the journal entries for Bridgeport in 2020 and 2021 related to this service contract (b) Prepare the journal entries for Tyler in 2022 related to the modified service contract, assuming a prospective approach. (c) Repeat the requirements for part (b), assuming Tyler and Walleye agree on a revised set of service: (fewer bookkeeping services but more tax services) in the extended contract period and the modification results in a separate performance obligation Expert Answer This solution was written by a subject matter expert. It's designed to help students like you learn core concepts. Step-by-step Step 1/2 A service contract or an agreement is the contract between the render of services and the customer. includes the signing of document which includes all the conditions and terms for the deal. This contract can be modified with the consent of both parties. Step 2/2 a) Prepare required journal as follows: b) Prepare journal for modified service contract as follows