Deferred Revenue Adjusting Entries

Olney Cleaning Company had the following items that require adjustment at year end.

a$.$ For one cleaning contract, $$10,300$ cash was received in advance. The cash was credited to Unearned Service Revenue upon receipt. At year end, $$1,820$ of the service

revenue was still unearned.

b$.$ For another cleaning contract, $$8,000$ cash was received in advance and credited to Unearned Service Revenue upon receipt. At year end, $$2,600$ of the services had

been provided.

Required:

Prepare the adjusting journal entries needed at December $31.$ If an amount box does not require an entry, leave it blank.

Dec. $31!$

Dec. $31$

What is the effect on the financial statements if these adjusting entries are not made?

In both of these cases, a liability $($unearned service revenue$)$ was originally created when cash was

prior to the performance obligation being

satisfied $($prior to the revenue being earned$).$ The adjusting entries

period. If these adjusting entries were not made, revenue would be

the previously created liability by the amount of revenue earned during the

addition, the

of revenue would result in an

: and liabilities $($unearned revenue$)$ would be

$.$ In

stockholders' equity will also be

of net income. Finally, because revenue is then closed to Retained Earnings,

What is the balance in Unearned Service Revenue at December $31$ related to the two cleaning contracts?

$