On September 1, Capitol Maintenance Company contracted to provide monthly maintenance services for the next seven months at a rate of $2,300 per month. The client paid Capitol $16,100 on September 1. The maintenance services began on that date. Assuming Capitol records deferred revenues using the alternative treatment, what would be the adjusting entry recorded on December 31?

answer choices

No entry is needed since revenue was recorded on September 1

Debit Service Revenue and credit Unearned Revenue for $6,900

Debit Service Revenue and credit Unearned Revenue for $16,100

Debit Unearned Revenue and credit Service Revenue for $9,200

Which of the following accounts does cash-basis accounting ignore?

answer choices

Payables

Revenue

Cash

Expenses