$2$ Assignment $-$ Chapter $3$

Question $7,$ EF$3$A$-32($similar to$)$

HW Score: $74\mathrm{.}91\%,5\mathrm{.}99$ of $8$ points

Part $3$ of $5$

Points: $0\mathrm{.}45$ of $1$

At the beginning of the year, Spruce Advertising owed customers $$3,200$ for unearned revenue collected in advance. During the year, Spruce received advance cash receipts of $$7,500$ and earned $$45,000$ of service revenue $($exclusive of any amount earned from advance payments$).$ At year$-$end, the liability for unearned revenue is $$4,500$ and unadjusted service revenue is $$45,000.$

Read the requirements.

$\backslash$table$[[$Earned from advance collections,$6,200,\backslash$table$[[3,200$ Unadj. bal.$],[7,500$ Cash collected for future services$]]],[,,4,500$ Bal.$]]$

Service Revenue

$\backslash$table$[[,45,000$ Unadj. bal.$],[,6,200$ Earned from advance collections$],[,51,200$ Bal.$]]$

Requirement $2.$ Record the adjusting entry assuming that Spruce records the cash receipt of unearned revenue by initially crediting a revenue account. Post the adjusting entry to the Unearned Revenue and Service Revenue T$-$accounts. Make sure to include the beginning balance in the Unearned Revenue T$-$account and the additional unearned revenue in the Service Revenue T$-$account.

Begin by recording the adjusting entry assuming that Spruce records unearned revenue by initially crediting a revenue account. $($Record debits first, then credits. Select the explanation on the last line of the journal entry.$)$

$\backslash$table$[[$Date$,$Accounts and Explanation,Debit,Credit$],[,,,],[,,,],[,$To record additional unearned revenue.,,$]]$