On November 1, 2018, Dallas Company entered into a contract to provide services

Question

On November 1, 2018, Dallas Company entered into a contract to provide services to Gibbons Company for six months, with the total $6,300 payment to be made at the end of the six-month period. After the proper adjusting entry is recorded, Dallas Company's 2018 financial statements will reflect which of the following?

A. Advances from Customers:       4,200

Service Revenue:           2,100

B. Accounts Receivable:           4,200

Service Revenue:           4,200

C. Accounts Receivable:           2,100

Service Revenue:           2,100

D. Advances from Customers:       2,100

Service Revenue:           4,200

Explanation / Answer

Answer is Journal entry is: Accounts receivable Dr. 2100       Service revenue Account 2100 Explanation: Total contract for 6 months 6300 Number of months of contract 6 Revenue per month 1050 Revenue for 2 months to be accrued 2100

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