On August 1 of the current year, Jamie Simmons received $5,400 for legal services to be performed evenly throughout the next six months. An adjusted trial balance prepared on December 31 of the current year will show a credit balance in Unearned Revenue in the amount of:

Question

Quizplus · Accepted Answer

Since the legal services were to be performed evenly throughout the next six months, as of December 31 (4 months after receiving payment), Jamie Simmons would have only earned half of the revenue received. Therefore, the revenue earned would be $2,700, and the remaining $2,700 would still be considered unearned revenue, resulting in a credit balance of $900 in the Unearned Revenue account.

On August 1 of the Current Year, Jamie Simmons Received