Use the information above to answer the following question.Assuming Disco World adjusts its accounts only at its December 31 year end,what entry must Disco World make to account for the services provided through that date?
A) Debit Cash and credit Dance Lessons Revenue for $3,000
B) Debit Unearned Revenue and credit Dance Lessons Revenue for $4,500
C) Debit Unearned Revenue and credit Dance Lessons Revenue for $3,000
D) Debit Dance Lessons Revenue and credit Unearned Revenue for $3,000

Question

Quizplus · Accepted Answer

Disco World has received $4,500 in advance for dance lessons that have not yet been provided. As of December 31, they have provided $3,000 worth of dance lessons. Therefore, they need to recognize the revenue earned through that date by debiting the liability account Unearned Revenue and crediting the income account Dance Lessons Revenue for $3,000. The remaining $1,500 will be recognized as revenue in the following year when the lessons are provided.

Use the Information Above to Answer the Following Question