Cornerstone Exercise 3-20 (Algorithmic) Unearned Revenue Adjusting Entries Olney Cleaning Company had the following items that require adjustment at year-end: a. For one cleaning contract, $13,700 cash was received in advance. The cash was credited to Unearned Service Revenue upon receipt. At year-end, $2,695 of the service revenue was still unearned. b. For another cleaning contract, $11,420 cash was received in advance and credited to Unearned Service Revenue upon receipt. At year-end, $4,760 of the services had been provided. Required: 1. Prepare the adjusting entries needed at December 31. Dec. 31 Unearned Service Revenue Service Revenue (Record earned revenue) Dec. 31 Unearned Service Revenue Service Revenue (Record earned revenue) 9,250 9,250 2,700 2,700 2. What is the effect on the financial statements if these adjusting entries are not made? If these adjusting entries were not made, revenue would be and liabilities would be l This would result in an of net income and an of shareholders' equity. 3. What is the balance in Unearned Service Revenue at December 31 related to the two cleaning contracts?