Answer :
To journalize the adjusting entry for the services completed, we need to follow these steps:
1. Identify the Accounts Involved:
- Unearned Revenue (Liability account)
- Service Revenue (Revenue account)
2. Determine the Amounts:
- The initial advance payment received was \[tex]$2,300 recorded as Unearned Revenue. - The amount of services completed by December 31 is \$[/tex]1,500.
3. Record the Adjusting Entry:
- Debit Unearned Revenue to decrease the liability because the services were rendered.
- Credit Service Revenue to recognize the revenue now earned.
4. Format the Journal Entry:
- Date: December 31
- Debit Unearned Revenue: \[tex]$1,500 - Credit Service Revenue: \$[/tex]1,500
- Explanation: To record revenue earned.
Here is the detailed journal entry in the required format:
[tex]\[ \begin{array}{c||c||c||c|} \text{Date} & \text{Accounts and Explanation} & \text{Debit} & \text{Credit} \\ \hline \hline \text{(a) Dec. 31} & \text{Unearned Revenue} & \$1,500 & \\ \hline & \text{Service Revenue} & & \$1,500 \\ \hline & \text{To record revenue earned.} & & \\ \hline \end{array} \][/tex]
The adjusting entry on December 31 recognizes the portion of the services that Alston IT Services has completed, which shifts \[tex]$1,500 from Unearned Revenue to Service Revenue. As a result, the remaining unearned revenue is \$[/tex]800.
1. Identify the Accounts Involved:
- Unearned Revenue (Liability account)
- Service Revenue (Revenue account)
2. Determine the Amounts:
- The initial advance payment received was \[tex]$2,300 recorded as Unearned Revenue. - The amount of services completed by December 31 is \$[/tex]1,500.
3. Record the Adjusting Entry:
- Debit Unearned Revenue to decrease the liability because the services were rendered.
- Credit Service Revenue to recognize the revenue now earned.
4. Format the Journal Entry:
- Date: December 31
- Debit Unearned Revenue: \[tex]$1,500 - Credit Service Revenue: \$[/tex]1,500
- Explanation: To record revenue earned.
Here is the detailed journal entry in the required format:
[tex]\[ \begin{array}{c||c||c||c|} \text{Date} & \text{Accounts and Explanation} & \text{Debit} & \text{Credit} \\ \hline \hline \text{(a) Dec. 31} & \text{Unearned Revenue} & \$1,500 & \\ \hline & \text{Service Revenue} & & \$1,500 \\ \hline & \text{To record revenue earned.} & & \\ \hline \end{array} \][/tex]
The adjusting entry on December 31 recognizes the portion of the services that Alston IT Services has completed, which shifts \[tex]$1,500 from Unearned Revenue to Service Revenue. As a result, the remaining unearned revenue is \$[/tex]800.
