1. Accrual Based Accounting Adjusting Journal Entries (AJEs): Globex Gym, Inc. receives a total cash payment in advance of $1,080 on 9/1/2020 from a customer, Clyde, for an annual gym membership covering the period of 9/1/2020 8/31/2021 (i.e. $1,080 = $90 per month for 12 months).

1. Record the journal entry Globex Gym would make on September 1^st, 2020 when it receives the $1,080 cash payment from Clyde.
2. Record the adjusting entry Globex Gym would make to recognize Service Revenue on December 31^st, 2020. Assume Globex Gym uses an annual accounting period which ends on December 31^st, 2020 and adjusting entries are only made at the end of the annual accounting period on 12/31 (i.e. assume no adjusting entries have been recorded yet).
3. Calculate the adjusted balances of both the Deferred Revenue account and the Service Revenue account as of 12/31/2020. Assume the balances of the Deferred Revenue account and the Service Revenue account as of 9/1/2020 were both $0 and there are no other transactions.
4. What if Globex Gym did not make the adjusting entry on 12/31/2020 to recognize Service Revenue? Indicate by how much 2020s 1) assets, 2) liabilities, 3) revenues, 4) expenses, 5) net income, 6) retained earnings, and 7) SHE would be either under- or overstated if this adjusting entry were not recorde If no effect, write no effect.