On May 1,Sellers Marketing Company received $1,500 from Franco Marcelli for a marketing campaign effective from May 1 of the current year to April 30 of the following year.The Cash receipt was recorded as unearned fees and at year-end on December 31,$1,000 of the fees had been earned.Assuming adjustments are only made at year-end,the adjusting entry on December 31 would be:

Question

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The adjusting entry on December 31 would be a debit to Unearned Fees and a credit to Fees Earned for $1,000. This is because $1,000 of the original $1,500 has now been earned, leaving a remaining balance of $500 in unearned fees that will be earned during the remaining months of the marketing campaign.

On May 1,Sellers Marketing Company Received $1,500 from Franco Marcelli