On August 1,Year 1,Benjamin and Associates collected $18,000 in advance for legal services to be rendered for one year.Which of the following entries reflect the end-of-the-year adjustment to reflect revenue earned?

Question

Quizplus · Accepted Answer

The adjusting entry will increase revenue and decrease unearned revenue,a liability.The journal entry would be a debit to unearned revenue and a credit to revenue.$18,000 ÷ 12 months = $1,500 per month.August through December is five months.$1,500 × 5 = $7,500.

On August 1,Year 1,Benjamin and Associates Collected $18,000 in Advance