On December 13, 2018, Michael Company Received $10,000 in Cash $\begin{array}{lrr} \text { Cash } &10,000\\ \text { Unearned Revenue} &1,500\\ \text { Service Revenue} &&11,500\end{array}$

question 81

Short Answer

On December 13, 2018, Michael Company received $10,000 in cash as a payment in advance from a customer and credited Unearned Revenue. The balance in the Unearned Revenue account was $2,000 at the beginning of December. At the end of December, all but $600 had been earned. What adjusting entry is necessary at the end of December?
a.
$\begin{array}{lrr} \text { Cash } &10,000\\ \text { Unearned Revenue} &1,500\\ \text { Service Revenue} &&11,500\end{array}$


b.
$\begin{array}{lrr} \text { Unearned Revenue} &10,600\\ \text { Service Revenue } &&10,600\\\end{array}$


c.
$\begin{array}{lrr} \text { Unearned Revenue } &11,400\\ \text { Service Revenue } &&11,400\\\end{array}$

d.
$\begin{array}{lrr} \text { Service Revenue } &10,000\\ \text {Unearned Revenue } &&10,000\\\end{array}$

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Definitions:

Income

The money received by an individual or business for work, from investments, or from other sources.

Families

Groups of individuals related by blood, marriage, or other significant relationships who typically live together and share economic and social responsibilities.

Insurance Premium

The payment made to an insurance company for coverage, which usually occurs on a regular basis, such as monthly or annually.

Risk-Averse

Refers to the preference of individuals or organizations to avoid risks and opt for the most certain outcome.