Drop menu options are Adj Bal, Bal, Cash collected for future services, and Earned from advanced collections

At the beginning of the year, Choice Advertising owed customers $3,200 for unearned revenue collected in advance. During the year, Choice received advance cash receipts of $8,600 and earned $40,000 of service revenue (exclusive of any amount earned from advance payments). At year-end, the liability for unearned revenue is $4,700 and unadjusted service revenue is $40,000. Read the requirements. Requirement 1. Record the adjusting entry assuming that Choice records the cash receipt of unearned revenue by initially crediting a liability account. Post the adjusting entry to the Unearned Revenue and Service Revenue T-accounts. Make sure to include the beginning balance and additional unearned revenue in the Unearned Revenue T-account. Begin by recording the adjusting entry assuming that Choice records unearned revenue by initially crediting a liability account. (Record debits first, then credits. Select the explanation on the last line of the journal entry.) Date Accounts and Explanation Debit Credit Unearned Revenue 7,100 Service Revenue 7,100 i Requirements X To record service revenue that was collected in advance. Post the adjusting entry to the Unearned Revenue and Service Revenue T-accounts. Make sure to include the beginning balance and additio posting reference to show the ending balance of each account.) of each account prior to any adjustments or cash receipts. Use a "Bal." Unearned Revenue 1. Record the adjusting entry assuming that Choice records the cash receipt of unearned revenue by initially crediting a liability account. Post the adjusting entry to the Unearned Revenue and Service Revenue T-accounts. Make sure to include the beginning balance and additional unearned revenue in the Unearned Revenue T-account. 2. Record the adjusting entry assuming that Choice 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. 3. Compare the ending balances of the T-accounts under both approaches. Are they the same? Service Revenue Print Done