Oriole Financial Services performs bookkeeping and tax-reporting services to startup companies in the Hiawatha area. On January 1, 2025, Oriole entered into a 3-year service contract with Pharoah Tech. Pharoah promises to pay $21,600 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $19,400. In addition, Pharoah agrees to pay an additional $48,500 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract. (a) Prepare the journal entries for Oriole in 2025 and 2026 related to this service contract. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.)

Oriole Financial Services performs bookkeeping and tax-reporting services to startup companies in the Hiawatha area. On January 1, 2025, Oriole entered into a 3-year service contract with Pharoah Tech. Pharoah promises to pay $21,600 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $19,400. In addition, Pharoah agrees to pay an additional $48,500 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract. (a) Prepare the journal entries for Oriole in 2025 and 2026 related to this service contract. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 7C: On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial...

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