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Use the following information to answer the next question. On May 1, 2021, Aurora Co. signed a contract with a client for $72,000 cash based
Use the following information to answer the next question. On May 1, 2021, Aurora Co. signed a contract with a client for $72,000 cash based on which Aurora agrees to provide consulting services to the client for a subsequent two-year period (i.e. from May 1, 2021 through April 30, 2023). The customer will be billed annually and full payment will be received on May 5, 2023. Assume that Aurora has provided consulting services during 2021 and makes any necessary adjusting entries related to this transaction only at the end of the fiscal year on Dec. 31. 10. What adjusting journal entry should Aurora make on December 31, 2021? a. Dr. Cash 36,000 Cr. Service Revenue 36,000 b. Dr. Accounts Receivable 36,000 Cr. Service Revenue 36,000 C. Dr. Accounts Receivable 24,000 Cr. Service Revenue 24,000 d. Dr. Unearned Revenue 24,000 Cr. Service Revenue 24,000
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