On April 1, 2017, Planet Services received $8,000 in advance of performing the services from a customer for three months of service long dash - April, May and June. What would be the journal entry to adjust the accounts at the end of May? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) A. Debit Service Revenue $5,333, and credit Accounts Receivable $5,333. B. Debit Unearned Revenue $5,333, and credit Service Revenue $5,333. C. Debit Unearned Revenue $8,000, and credit Service Revenue $8,000. D. Debit Service Revenue $2,667, and credit Unearned Revenue $2,667.

Question

Business

Bender

8 November, 16:58

On April 1, 2017, Planet Services received $8,000 in advance of performing the services from a customer for three months of service long dash - April, May and June. What would be the journal entry to adjust the accounts at the end of May? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) A. Debit Service Revenue $5,333, and credit Accounts Receivable $5,333. B. Debit Unearned Revenue $5,333, and credit Service Revenue $5,333. C. Debit Unearned Revenue $8,000, and credit Service Revenue $8,000. D. Debit Service Revenue $2,667, and credit Unearned Revenue $2,667.

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Answers (1)

Know the Answer?

Jayden Fuentes · Answer 1

The correct answer is B

Explanation:

The journal entry which is to be recorded for the service revenue at the end of May is as follows:

Unearned Revenue A/c ... Dr $5,333

Service RevenueA/c ... Cr $5,333.

Working Note:

Revenue = Total amount * Number of months / Total months

where

Amount is $8,000

Number of months means at the end of May which is a 2nd month

Total months is 3 months (April, May and June)

= $8,000 * 2 / 3

= $5,333