Foley Marketing received $60,000 from a customer on January 2, 2022 to be on retainer for the next two years.The appropriate journal entry to recognize revenue at Foley's fiscal year-end on December 31, 2022 would be:
A)Dr Unearned Service Revenue $30,000 Cr Service Revenue $30,000
B)Dr Service Revenue $30,000 Cr Unearned Service Revenue $30,000
C)Dr Service Revenue $30,000 Cr Cash $30,000
D)Dr Unearned Service Revenue $30,000 Cr Cash $30,000

Question

Quizplus · Accepted Answer

Foley Marketing should recognize half of the $60,000 as revenue for the first year, which is $30,000. The correct entry is to debit Unearned Service Revenue and credit Service Revenue to reflect the earned portion.

Foley Marketing Received $60,000 from a Customer on January 2