Witten Bus Transportation provides on-campus bus services for universities.

On January 1, it enters into a one-year contract with State University to operate five bus

lines traveling throughout the campus. Under the contract, Witten will be paid $120,000

on the last day of each month. In addition, Witten will receive an additional $90,000 at

the end of each six-month period, provided it remains free of accidents.

On January 1, based on historical experience, Witten estimated that there is a 75%

chance that it will remain free of accidents for the entire year.

On March 20, three of the most senior drivers at Witten abruptly left. As a result, Witten

had to hire inexperienced drivers to fill the vacant positions. Consequently, Witten

revised its estimate to a 30% chance that it would earn the semiannual bonus.

On June 30, State confirmed that there was no accident between January and June, so

Witten would be entitled to the semiannual bonus.

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

Required:

a. Prepare Wittens January journal entry to account for the revenue earned

from January 1 to January 31.

b. Prepare Wittens March 31 journal entry to record the revenue earned from

March 1 to March 31, as well as any appropriate adjustments to the revenue

presumed already recorded as earned from January 1 to February 28.

c. Prepare Wittens June 30 journal entry to account for the revenue earned

from June 1 to June 30, as well as any necessary adjustments to revenue.