Question

Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Sandhill Corporation purchased computer equipment, installation and training for a total cost of $125325 on March 15, 2018. Estimated standalone fair values of the equipment, installation and training are $73500, $70800 and $22800 respectively. The journal entry to record the transaction on March 15, 2018 will include a

debit to Unearned Service Revenue of $22800.

credit to Service Revenue of $70800.

credit to Sales Revenue for $125325.

credit to Unearned Service Revenue of $17100.

Answer 1

Answer -

The Answer is Credit to Unearned Service Revenue of $ 17,100

Explanation:

1) Training Services revenue has been collected on March. 15 and service is going to be performed in June. So, We have to create Unearned Service Revenue account to an amount of

Total of standalone fair values = $73,500 + $70,800 + $22,800 = $167,100

Unearned revenue = $125,325X $22,800 / $167,100 = $17,100

Credit to unearned service revenues of $17,100.

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