ABC Company adjusts its accounts on a monthly basis. The company closes its accounts at the end of each fiscal year. The following is the unadjusted trial balance prepared at December 31, 2020:

ABC Company

Unadjusted Trial Balance

December 31, 2020

Cash

$15,000

Notes receivable

30,000

Unexpired Insurance

4,500

Office Supplies

1,600

Land

78,000

Equipment

42,000

Accumulated depreciation: Equipment

$21,600

Notes Payable

40,000

Unearned service revenue

56,000

Capital stock

20,000

Retained Earnings

10,500

Dividends

2,000

Service revenue

43,800

Salaries expense

12,000

Depreciation expense: Equipment

4,500

Rent expense

500

Electricity expense

1,800

$191,900

$191,900

Other data:

1. Office supplies on hand at December 31, 2020, $700.

2. On September 1, 2020, ABC Company purchased a one-year insurance policy and paid $6,000.

3. Useful life of the equipment is 7 years.

4. According to the records, $12,000 of advance cash receipts originally recorded as unearned service revenue has been earned for the month of December.

The adjusting entry at December 31, 2020 to record the service revenue earned from advance collections during December includes