Long-term contract
On January 1, 2020, Charger Corp., a management consulting firm, entered into a contract with Viking Company to provide advisory services over a four-year period. The contract price was $ 4,000,000 and was to be paid in four equal annual payments at the end of each year. Charger's expenses relating to this contract were $ 650,000, $ 730,000, $ 780,000 and $ 710,000 for 2020-2023. Collectibility was reasonably assured throughout the duration of the contract and measurement uncertainties were NOT an issue.
Instructions
Using the contract-based revenue recognition model, prepare journal entries for all four years.

Question

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The Answer of Long-term contract
On January 1, 2020, Charger Corp., a management consulting firm, entered into a contract with Viking Company to provide advisory services over a four-year period. The contract price was $ 4,000,000 and was to be paid in four equal annual payments at the end of each year. Charger's expenses relating to this contract were $ 650,000, $ 730,000, $ 780,000 and $ 710,000 for 2020-2023. Collectibility was reasonably assured throughout the duration of the contract and measurement uncertainties were NOT an issue.
Instructions
Using the contract-based revenue recognition model, prepare journal entries for all four years.

Long-Term Contract On January 1, 2020, Charger Corp., a Management Consulting Firm