Question

Rocky Guide Service provides guided 1–5 day hiking tours throughout the Rocky Mountains. Wilderness Tours hires Rocky to lead various tours that Wilderness sells. Rocky receives $1,800 per tour day, and shortly after the end of each month Rocky learns whether it will receive a $180 bonus per tour day it guided during the previous month if its service during that month received an average evaluation of "excellent" by Wilderness customers. The $1,800 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, Rocky estimated that there is a 30% chance it will earn the bonus for July tours. It guided a total of 10 days from July 1–July 15.

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

On August 5 Rocky learned that 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.

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As of now I have (all the labels (A/R, Service Rev...)were marked as correct):

July 15:

A/R 18000

Bon/R 540

Serv Rev 18540

July 31

A/R 27000

Bonus/R 2160

Ser Rev 29160

Aug 05

Cash 45000

A/R 45000

Aug 5 (adjustments)

Serv Rev 2700

B/R 2700

Answer 1

No	Date	General Journal				Debit	Credit
1)	15-Jul	Accounts receivable				18000
		Service revenue					18000
2)	31-Jul	Accounts receivable				27000
		Bonus receivable				4500
		Service revenue					31500
3)	5-Aug	Cash				45000
		Accounts receivable					45000
4)	5-Aug	Service revenue				4500
		Bonus receivable					4500
Explanation:
1)	only revenue recognised for 10 days tour , no bonus recognised as chances
	are less than 50%
2)	revenue recognised for another 15 days , also bonus recognised for 25 days (10+15)
	as chances raised to 80%
3)	Basic revenue received
4)	Bonus entry reversed