On Jan 1, Consulting Group entered into a contract to because of a cost reduction program for Greenfield Group over a a 6 month period. Consulting...

On Jan 1, Consulting Group entered into a contract to because of a cost reduction program for Greenfield Group over a a 6 month period. Consulting Group will receive a $58.4k fee from Greenfield Group at the end of each month for 6 months. If total cost savings reach a specific target, Consulting Group will receive an additional $29k bonus from Greenfield Group at the end of the contract . Consulting Group 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.

What are the following journal entries for Consulting Group in questions 1-3:

1. What is the journal entry on Jan 31 to record the collection of cash and accrual of bonus receivable to arrive at the total revenue for January
2. Assuming total cost savings exceed target, what is the journal entry on June 30 for receipt of the 6 months bonus
3. Assuming total cost savings fall short of target, what is the journal entry on June 30 for payment of the penalty