The Jones Company sells service contracts to repair copiers at \(\$ 300\) per year. When the contract is signed, the \(\$ 300\) fee is collected and the Service Contract Fees Received in Advance account is credited. Revenues on contracts are recognized on a quarterly basis during the year in which the coverage is in effect. On January \(1,1,000\) service contracts were outstanding. Of these, 500 expired at the end of the first quarter, 300 at the end of the second quarter, 150 at the end of the third quarter, and 50 at the end of the fourth quarter. Sales and service during the year came to these amounts (assume that all sales occurred at the beginning of the quarter):

a Prepare journal entries for the first three quarters of the year for the Jones Company. Assume that quarterly reports are prepared on March 31. June 30, and September 30.
b What is the balance in the Service Contract Fees Received in Advance account on December 31?

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First Quarter Second Quarter Third Quarter Fourth Quarter Sales of Contracts Service Expenses $120,000 (400 contracts) $50,000 240,000 (800 contracts) 60,000 90,000 (300 contracts) 45,000 60,000 (200 contracts) 55,000