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. Tao Co. receives $10,000 cash in advance for four months of evenly planned legal services beginning on October 1. Tao records it by debiting Cash and crediting Unearned Revenue both for $10,000. It is now December 31, and Tao has provided legal services as planned. What adjusting entry should Tao make to account for the work performed from October 1 through December 31? Step 1: Determine what the current account balance equals. Debitor Credit? 10,000 Unearned revenue 10,000 10,000 $ 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