On July 1, 2017, Blossom Company pays $18,000 to Sunland Company for a 1-year in

Question

On July 1, 2017, Blossom Company pays $18,000 to Sunland Company for a 1-year insurance contract. Both companies have fiscal years ending December 31 Journalize the entry on July 1 and he ad usting entry on December 31 or Sunland Company. Sunland uses the accounts unearned Service Revenue and Service Revenue. (Record journal entries in theor erprese ted the problem. If no entry is required select No Entry," for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do t indent marual Date Account Titles and Explanation Debit Credit Post the entry on July 1 and the adjusting entry on December 31 for Sunland Company. (Post entries in the order of journal entries presented in the previous part.) Unearned Service Revenue Service Revenue

Explanation / Answer

Date Account titles & Explanations Debit Credit 7/1/2017 Cash 18,000 unearned service revenue 18,000 12/31/2017 unearned service revenue 9000 service revenue 9,000 (18000/12)*6 unearned service revenue 12/31/2017 9,000 7/1/2017 18,000 Bal 31 dec 9,000 Service revenue 12/31/2017 9,000 Bal 31 dec 9,000

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