Question

On July 1, 2022, Blossom Company pays $15,624 to Sheridan Company for a 2-year insurance contract. Both companies have fiscal years ending December 31.

For Blossom Company, journalize the entry on July 1 and the annual adjusting entry on December 31. (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.) Date Debit Credit Account Titles and Explanation Unearned Service Revenue July 1 15624 1562 Dec. 31 Unearned Service Revenue 3906 Service Revenue 390

Answer 1

Date	Account Titles	Debit	Credit
1-Jul	Prepaid Insurance	$          15,624
	Cash		$       15,624
31-Dec	Insurance Expense	$            3,906
	Prepaid Insurance		$         3,906

Prepaid Insurance
1-Jul	$       15,624	31-Dec	$         3,906
End Bal	$       11,718
Insurance Expense
31-Dec	$         3,906
End Bal	$         3,906

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