1. On July 1, 2014, Seng Co. pays $15,300 to Nance Insurance Co. for a 2-year in

Question

1. On July 1, 2014, Seng Co. pays $15,300 to Nance Insurance Co. for a 2-year insurance contract. Both companies have fiscal years ending December 31.

-For Seng Co., journalize the entry on July 1 and adjusting entry on December 31.

-For Seng Co., post the entries passed on on July 1 and on December 31.

On July 1, 2014, Seng Co. pays $17,100 to Nance Insurance Co. for a 1-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 Nance Insurance Co. Nance uses the accounts Unearned Service Revenue and Service Revenue.

On July 1, 2014, Seng Co. pays $17,100 to Nance Insurance Co. for a 1-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 Nance Insurance Co. Nance uses the accounts Unearned Service Revenue and Service Revenue.

Explanation / Answer

Seng Co July 1 2014 Prepaid Insurance Dr 15300              Cash Cr 15300 ( To record payment of insurance premium) Dec 1 2014 Insurance expenses Dr 3825             Prepaid Insurance Cr 3825 ( to record adjusting expenses for 6 months 15300/24*6)              Prepaid Insurance July 1 2014 To Cash 15300 Dec 1 2014 By Insurance expenses 3825              Insurance expenses Dec 1 2014 To prepaid Insurance 3825 Nance Insurance Company July 1 2014 Cash Dr 17100           Unearned service revenue Cr 17100 ( To record insurance received from Seng Co) Dec 31 2014 Unearned service revenue Dr 8550                Service Revenue Cr 8550 ( to record adjusting expenses for 6 months 17100/12*6)

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