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Business, 21.05.2020 21:15 tiiia

Seadrill Engineering sold software to oil-drilling firms. In addition to providing the software, the company also provides consulting services and support for 5 years to ensure smooth operation of the software. The total transaction price is $350,000. Based on standalone values, the company estimates the consulting services and support have a value of $150,000 and the software license has a value of $250,000. Seadrill generally records software sales using Sales Revenue account and consulting service using Service Revenue account. Assuming the performance obligations are not interdependent, the journal entry to record the transaction includes:A) a credit to sales revenue for $250,000 and a credit to unearned service revenue of $100,000.B) a credit to service revenue of $100,000.C) a credit to unearned service revenue of $100,000.D) a credit to sales revenue of $350,000.

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Seadrill Engineering sold software to oil-drilling firms. In addition to providing the software, the...

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