Prepare the journal entry to record this transaction on January 2, 2025, and on December 31, 2025 (assuming financial statements are prepared on December 31, 2025). (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. List all debit entries before credit entries. Record Journal entries in the order presented in the problem) Show Transcribed Text Date (b) Account Titles and Explanation Show Transcribed Text 2 2 C Debit 00000 Credit Repeat the requirements for (a), assuming that in addition to the assurance warranty, Ivanhoe sold Kingbird an extended warranty (service-type warranty) for an additional 2 years (2027-2028) for $820. (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. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)

Prepare the journal entry to record this transaction on January 2, 2025, and on December 31, 2025 (assuming financial statements are prepared on December 31, 2025). (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. List all debit entries before credit entries. Record Journal entries in the order presented in the problem) Show Transcribed Text Date (b) Account Titles and Explanation Show Transcribed Text 2 2 C Debit 00000 Credit Repeat the requirements for (a), assuming that in addition to the assurance warranty, Ivanhoe sold Kingbird an extended warranty (service-type warranty) for an additional 2 years (2027-2028) for $820. (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. List all debit entries before credit entries. 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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10E

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On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.
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