On April 10,2013,Planet Services received $4,800 in advance from a customer for one month's service,to be provided from April 10,2013 to May 10,2013.What would be the journal entry to adjust the accounts at the end of April?
A)debit Service Revenue $1,600 and credit Unearned Revenue $1,600
B)debit Unearned Revenue $3,200 and credit Service Revenue $3,200
C)debit Unearned Revenue $4,800 and credit Service Revenue $4,800
D)debit Service Revenue $3,200 and credit Accounts Receivable $3,200

Question

Quizplus · Accepted Answer

By the end of April, 20 days of service have been provided, so 20/30 of the $4,800 should be recognized as revenue. This amounts to $3,200, which should be moved from Unearned Revenue to Service Revenue.

On April 10,2013,Planet Services Received $4,800 in Advance from a Customer