A company receives $6,500 for two season tickets sold on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is a debit to Cash, $2,500, and a credit to Ticket Revenue, $2,500.

Question

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The adjusting entry made at that time would be a debit to Unearned Ticket Revenue, $4,000, and a credit to Ticket Revenue, $4,000, since $6,500 was received for the tickets but only $2,500 was earned by December 31.

A Company Receives $6,500 for Two Season Tickets Sold on September