Brief Exercise 3-06 On July 1, 2019, Major Co. pays $15,120 to Mesa Insurance Co. for a 4-year insurance contract. Both companies have fiscal years ending December 31. Journalize and post the entry on July 1 and the adjusting entry on December 31 for Mesa Insurance Co. Mesa uses the accounts Unearned Service Revenue and Service Revenue. (C Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Unearned Service Revenue Service Revenue

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Brief Exercise 3-06
On July 1, 2019, Major Co. pays $15,120 to Mesa Insurance Co. for a 4-year insurance contract. Both companies have fiscal years ending December 31.
Journalize and post the entry on July 1 and the adjusting entry on December 31 for Mesa Insurance Co. Mesa uses the accounts Unearned Service Revenue and Service Revenue. (C
Record journal entries in the order presented in the problem. Round answers to o decimal places, e.g. 5,275.)
Date
Account Titles and Explanation
Debit
Credit
Unearned Service Revenue
Service Revenue
Transcribed Image Text:Brief Exercise 3-06 On July 1, 2019, Major Co. pays $15,120 to Mesa Insurance Co. for a 4-year insurance contract. Both companies have fiscal years ending December 31. Journalize and post the entry on July 1 and the adjusting entry on December 31 for Mesa Insurance Co. Mesa uses the accounts Unearned Service Revenue and Service Revenue. (C Record journal entries in the order presented in the problem. Round answers to o decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Unearned Service Revenue Service Revenue
Expert Solution
Woring:

Revenue earned on December 31, 2019 = (Total amount received / Total years) x 6/12

= ($15120 / 4 years) x 6/12

= $1,890

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