On May 1, 2020, Goldenrod Co. signed a contract with a client for $144,000 cash based on which Goldenrod agrees to provide consulting services to the client for a subsequent two-year period (i.e., from May 1, 2020 through April 30, 2022). The customer will be billed annually and full payment will be received on May 5, 2022. Assume that Goldenrod has provided consulting services during 2020 and makes any necessary adjusting entries related to this transaction at the end of the fiscal year on Dec. 31.

1. What adjusting journal entry should Goldenrod make on December 31, 2020?
2. Dr. Cash 72,000

Cr. Service Revenue 72,000

1. Dr. Accounts Receivable 48,000

Cr. Service Revenue 48,000

1. Dr. Unearned Revenue 48,000

Cr. Service Revenue 48,000

1. Dr. Cash 90,000

Cr. Service Revenue 90,000