[confused10191]

I'm having a hard time solving this problem. I think I should divide 18,000 by 12 or 36

BE3-6

On July 1, 2010, Spahn Co. pays $18,000 to Randle Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. Prepare the journal entry on July 1 and the adjusting entry on December 31 for Randle Insurance Co.

Date Account/Description Debit Credit
July 1




Dec. 31





Using T accounts, enter the balances in the accounts below, post the adjusting entry as necessary, and indicate the adjusted balance in each account. (If there is no transaction, enter NA as the date and 0 for the amount. Do not leave any fields blank.)

Unearned Insurance Revenue

12/31 Bal. 12/31 Bal.



Insurance Revenue







Using T accounts, enter the balances in the accounts below, post the adjusting entry as necessary, and indicate the adjusted balance in each account. (If there is no transaction, enter NA as the date and 0 for the amount. Do not leave any fields blank.)

Unearned Insurance Revenue

12/31 Bal. 12/31 Bal.



Insurance Revenue

[pready]

The calculation of amounts is calculated the same way as your other post.

Your first entry will be:
Debit Cash for 18,000
Credit Unearned Insurance Revenue for 18,000

Your adjsting entry will be:
Debit Unearned Insurance Revenue for the amount calculated previously
Credit Insurance Revnue for the same amount