QS 3-10 Unearned (deferred) revenues adjustments P2 For each separate case below, follow the three-step process for adjusting the unearned revenue liability account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Unearned Rent Revenue. The Krug Company collected $6,000 rent in advance on November 1, debiting Cash and crediting Unearned Rent Revenue. The tenant was paying 12 months' rent in advance and occupancy began on November 1. b. Unearned Services Revenue. The company charges $75 per insect treatment. A customer paid $300 on October 1 in advance for four treatments, which was recorded with a debit to Cash and a credit to Unearned Services Revenue. At year-end, the company has applied three treatments for the customer. c. Unearned Rent Revenue. On September 1, a client paid the company $24,000 cash for six months of rent in advance and took occupancy immediately. The company recorded the cash as Unearned Rent Revenue.

QS 3-10 Unearned (deferred) revenues adjustments P2 For each separate case below, follow the three-step process ior adjusting the unearned revenue liability account at December 31 . Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step I to step 2. Assume no other adjusting entries are made during the year: a. Unearned Rent Revenue. The Krug Coppany collected $6,000 rent in advance on November I. debiting Cash and crediting Unearned Rent Revenue. The tenant was paying 12 month' rent in advance and occupancy began on Nowember 1. b. Unearned Services Revenue. The company charges $75 per insect treatment. A customer paid $300 on October 1 in advance for four treatments, which was recorded with a debit to Cash and a credit to Unearned Services Revenue. Ar yearend, the eornpany has applied three treatments for the customer. c. Unearned Rent Revenue, On September 1, a client paid the company $24,000 cash for six months of rent in advance and took occupancy immediately. The company recorded the cash as Unearned Rent Revenue