Question Content Area

Unearned Revenue

Jennifers Landscaping Services signed a $2,160-per-month contract on November 1 to provide plant-watering services for Lola Inc.s office buildings. Jennifers received 3 months service fees in advance on signing the contract.

1. 11/1 Dr Cash $6480

Cr Unearned Sales Revenue 6480

2. 12/31 Dr Unearned Sales Revenue $4,320

Cr Sales Revenue 4,320

3. Conceptual Connection: How would the advance payment [account(s) and amount(s)] be reported in Jennifer's December 31, 2019, balance sheet?

Unearned sales revenue in the amount of $ _________ would appear among Jennifer's

current liabilities. How would the advance payment [account(s) and amount(s)] be reported in Lola's December 31, 2019, balance sheet? A prepaid asset in the amount of $______. Would appear on Lola's current assets.

I am just confused on the amounts that should be used for the third part of this question. Part one and two is filled out correctly, and I tried to enter the 4,320 from part two into the blanks but when I checked it that was incorrect.