can i please get an explanation for the first part as well?

On July 1, 2022, Sheridan Company pays $ 18,500 to Wildhorse Co.for a 2-year insurance contract. Both companies have fiscal years ending December 31. (a1) Your answer is partially correct. For Sheridan Company. journalize the entry on July 1 and the annual adjusting entry on December 31. (Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 Prepaid Insurance 18500 Cash 18 Dec. 31 Insurance Expense Prepaid Insurance (a2) For Sheridan Company, post the entries passed on July 1 and December 31. (Post entries in the order of journal entries presented in the previous part.) Prepaid Insurance Insurance Expense