Question

 On July 1, 2022. Carla Vista Co. pays $14,632 to Sandhill Co. for a 2-year insurance contract. Both companies have fiscal years

 ending December 31.

 Journalize the entry on July 1 and the adjusting entry on December 31 for Sandhill Co. Sandhill uses the accounts Unearned Service Revenue and Service Revenue. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually)

 Post the entry on July 1 and the annual adjusting entry on December 31 for Sandhill Co. (Post entries in the order of journal entries presented in the previous part.)

Answer 1

	Working Notes:
		Calculation of Earned Revenue as on December 31
		Advance Received	$                 14,632
		Deivide by :	"/" By
		Period of revenue received	24	Months
		Per Month Revenue	$                       610
		Multiply By	"X' By
		No. of Months Expired	6	Months
		December 31 earned revenue =	$                   3,658
Solution: 1
	Date	Account Title and explanation	Debit		Credit
	July. 01 2022	Cash	$                 14,632
		Unearned Service Revenue			$                                 14,632
		(To Record the receipt of advance)
	Dec . 31 2022	Unearned Service Revenue	$                   3,658
		Service Revenue			$                                    3,658
		(To Record the revenue earned)
Solution: 2
		UNEARNED SERVICE REVENUE
	7/1	Cash Received	$                 14,632		12/31 = Service Revenue	$                 3,658
	12/31	Balance as on Dec. 31	$                 10,974
		SERVICE REVENUE
	12/31	Unearned Service Revenue	$                   3,658		12/31 Closing balance	$                 3,658