Answer:
1. Debit Bank $36000, Credit Revenue $36000 ( same entry for all four months)
2. No journal entry require
3. Debit Bank $36000, Credit Revenue $36000 ( same entry for all four months)
4. Debit Bank $12000 , Credit Bonus receivable $12000
Explanation:
As soon Velocity enters into the contract he is obligated to provide the consulting services and since this is a contract for rendering services and payments will be made regardless of Velocity helping to increase sales level or not but Velocity will receive the monthly payments therefore He has earned the Revenue immediately. The conditions do not require Velocity to pay back the monthly payments if Burger Boy sales do not increase so no liability created.
upon entering the contract it was stated that if Velocity increases Sales for Burger Boy then it will receive a bonus of $12000 journal entry
Debit Bonus receivable $12000, Credit Bonus income
If Velocity fails to increase then
Debit contract refund $12000, Credit Refund payable
at the end of the contract Received the bonus
Debit Bank $12000, Credit Bonus receivable $12000