Seadrill Engineering Licensed Software to Oil-Drilling Firms for 5 Years

question 75

Multiple Choice

Seadrill Engineering licensed software to oil-drilling firms for 5 years.In addition to providing the software, the company also provides consulting services and support 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 $100,000 and the software license has a value of $250,000.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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Definitions:

Mesoamerican Mexico

Refers to the region and cultural area in the Americas, made up of Mexico and Central America, known for its pre-Columbian civilizations, such as the Aztec and Maya.

Human Sacrifice

The act of killing one or more humans as part of a ritual, intended to please or appease gods, spirits, or the deceased, found in various cultures throughout history.

Teotihuacán

Refers to an ancient Mesoamerican city located in what is now Mexico, known for its vast size, complex urban layout, and monumental pyramids like the Pyramid of the Sun and the Pyramid of the Moon.

Ritual

A set series of actions performed according to a prescribed order, often with symbolic meaning, used in religious, spiritual, or cultural ceremonies.