Duncan Services Initially Records Prepaid Expenses as Expenses,and Unearned Revenues $$\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$$

question 75

Essay

Duncan Services initially records prepaid expenses as expenses,and unearned revenues as revenues.Then at the end of the year,they make the necessary adjustments to accrual basis.On December 15,Duncan collected revenues of $1,000 in advance from a new client,and agreed to provide services to the client for the period of December 15 through January 15 of the following year.Please provide the adjusting entry that would be needed at year-end.
$$\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$$

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Definitions:

Long-Term U.S. Treasury Bonds

Government bonds issued by the United States Department of the Treasury with maturities typically longer than 10 years, providing stable income with low risk.

Risk Premium

The additional return over the risk-free rate that investors require as compensation for investing in risky assets.

Coefficient of Variation

A statistical measure of the dispersion of data points in a data series around the mean, expressed as a percentage of the mean, often used to assess the risk of an investment relative to its expected return.

Historical Excess Returns

The returns on an investment or portfolio in excess of a benchmark or risk-free rate, assessed over a specific historical period.