Anton's Agency sells an insurance policy offered by the Capital Insurance company for a commission of $200. In addition, Anton will receive an additional commission of $20 each year for as long as the policyholder does not cancel the policy after selling the policy. Anton does not have any performance obligations. Based on Anton's significant experience with these types of policies, he estimates that policyholders on average renew the policy for 4.5 years. There is no evidence to suggest that previous policyholder behavior will change. 1. Determine the transaction price of the arrangement for Anton, assuming 100 policies are sold. 2. Prepare journal entries, assuming that the 100 policies are sold in January 20x5 and that Anton receives commissions from Capital.
Anton's Agency sells an insurance policy offered by the Capital Insurance company for a commission of $200. In addition, Anton will receive an additional commission of $20 each year for as long as the policyholder does not cancel the policy after selling the policy. Anton does not have any performance obligations. Based on Anton's significant experience with these types of policies, he estimates that policyholders on average renew the policy for 4.5 years. There is no evidence to suggest that previous policyholder behavior will change.
1. Determine the transaction price of the arrangement for Anton, assuming 100 policies are sold.
2. Prepare
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