Foley Marketing received $60000 from a customer on January 2 2022 to be on retainer for the next two years.The appropriate adjustment to recognize revenue at Foley's fiscal year-end on December 31 2022 would be:

Question

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The adjustment required at the fiscal year-end on December 31 2022 would be to recognize half of the revenue ($30,000) as the retainer spans over a two-year period. Therefore, the appropriate adjustment would be to decrease the liability Unearned Revenue by $30,000 (reflecting the revenue being recognized) and increase Service Revenue by $30,000 (as the service is being provided).

Foley Marketing Received $60000 from a Customer on January 2