Question

Question 1 of 6 Current Attempt in Progress On July 1, 2022, Pharoah Co. pays $11,408 to Blossom Co. for a 2-year insurance contract. Both companies have fiscal years ending December 31. Your answer is partially correct. Journalize the entry on July 1 and the adjusting entry on December 31 for Blossom Co. Blossom 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.) Date Account Titles and Explanation Debit 11408 aly 1 Unearned Service Revenue ec. 31 Uneamed Service Revenue Service Revenue e Textbook and Media List of Accounts Your answer is partially correct. Post the entry on July 1 and the annual adjusting entry on December 31 for Blossom Co. (Post entries in the order of journal entries presented in the previous part.) 12/31 Unearned Service Revenue 7/1 . 11400 12/31 Bal Service Revenue e Textbook and Media Ust of Accounts Save for Later Attempts: unlimited Submit Answer 17 sty

Answer 1

date	accounts title	debit	credit
july 1	cash	11408
	unearned service revenue		11408
dec 31	unearned service revenue	2852
	service revenue		2852

on 1 july 2022 pharoah co and blossom co entered into an insurance contract amounting $11408 for 2 years. pharoah co pays $11408 to blossom co .the adjustment entry for blossom co at july 1 is to debit cash as the cash recieved and credit unearned service revenue .unearned service revenue is a liability account for the work has not yet performed.as liability increases it should be credited.

on 31 december 2022 the adjusting entry for blossom co is to debit unearned service revenue of amounting $2852(unearned service revenue is a liability account which should be debited when it decreases) and credit service revenue amounting to $2852 (service revenue is an income account which should be credited when it increases). the amount $2852 is service revenue realised for 6 months period of insurance amount.

calculations

amount is $11408 for 2 years ,that is 24 months

1 july 2022 to 31 december 2022 is a 6 month period.

amount realised for 6 months= $11408*(6/24)=$2850

                                               unearned service revenue

	debit		credit
dec 31	$2852	july 1	$11408
		balance at 31 dec	$8556

at july 1 unearned service revenue had a credit balance of $11408 and at december 31 it realised 6 months service revenue and debited to unearned service revenue account so the balance at 31 december is $8556 (11408-2852)

                                                      service revenue

at 31 december the 6 months period revenue is realised and it is credited to the service revenue account which has no balance till 31 december.the revenue realised is $2852 and it is credited as because of the service revenue is an income account.