Red Company entered into a three-year contract to provide services at $30,000 per year. The contract was for $90,000 in total and began at the beginning of year 2. Red Company will provide service on this contract continuously over the three-year period. The contract was paid in full by the customer on January 1, year 2 and the entire contract was recorded to revenue on that date. Record the necessary year 2 adjusting journal entry, if any.

Accounts Payable

Accounts Receivable

Accrued Liabilities

Accumulated Depreciation

Cash

Contract Asset

Contingent Liability

Cost of Goods Sold

Income Tax Expense

Interest Expense

Inventory

Operating Expenses

Other Assets

Other Income

Sales

Service Revenue

Stockholders' Equity

Unearned Revenue

No Entry Needed