On April 1 of the current year, Wood Services received $15,000 for services to be performed evenly over the next 12 months. Wood Services initially recorded the $15,000 as unearned service revenue. The adjusting entry on December 31 of the current year will include a:

Question

Quizplus · Accepted Answer

By December 31, 9 months of the 12-month service period have passed, so $11,250 ($15,000 * 9/12) should be recognized as earned revenue. The adjusting entry will credit service revenue for $11,250.

On April 1 of the Current Year, Wood Services Received