On May 1, 2015. Bee Advertising Company received $2,500 from Julie Cee for advertising services to be completed by April 30, 2016. Assume the receipt wasrecorded as unearned revenue and that at December 31, 2015, $1,000 of the fees had been earned. The adjusting entry prepared by Bee on December 31, 2015, shouldinclude:
A)A debit to Unearned Revenue for $500.
B)A debit to Revenue for $500.
C)A credit to Unearned Revenue for $500.
D)A debit to Revenue for $1,000.
E)A credit to Revenue for $1,000.

Question

Quizplus · Accepted Answer

The adjusting entry should recognize the earned revenue by debiting Unearned Revenue and crediting Revenue for the amount earned, which is $1,000.