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e Edit View History Bookmarks Window Help tion.com Saved 8 a. Tao Co. receives $10,900 cash in advance for 4 months of legal services on October 1, 2015, and records it.by debiting Cash and crediting Unearned Revenue both for $10,900. It is now December 31, 2015, and Tao has provided legal services as planned. What adjusting entry should Tao make to account for the work performed from October 1 through December 31, 2015? nts Skipped View transaction list eBook ference Journal entry worksheet Record the entry to recognize legal revenue earned. Note: Enter debits before credits. Transaction General Journal Debit Credit a. 4

Solution

Cash received in advance = 10900

Time period = 4months

Till Dec 31, services has been performed for 3 out of 4 months.

Hence the revenue earned will be 10900*3/4 = 8175

And the adjusting entry on Dec 31 will be

Debit

Credit

Unearned Revenue

8175

Revenue

8175

Remaining amount of 2725 will continue to occur in Unearned revenue account, since it belongs to Jan of next year

	Debit	Credit
Unearned Revenue	8175
Revenue		8175