Exercise 3-5 Preparing adjusting entries (annual)-unearned revenue LO4

Splish Splash Art is a centre that offers children's music and dance lessons. Splish Splash prepares annual financial statements and has a December 31, 2017, year-end.

• On September 1, Splish Splash Art collected $15,000 cash for dance lessons running from September 1, 2017 to December 31, 2017.
• On October 1, Splish Splash Art collects $5,000 cash ($2,500 per month) to rent it performance stage for the full month of December 2017 and January 2018
• On October 1, 2017, Splish Splash Art collects $8,000 cash for four months of music lessons The lessons run from October 1, 2017 to January 31, 2018

Required

For each transaction, record the initial journal entry and the adjusting entry required on December 31, 2017.