Hudson Law Corporation received $5,500 cash for legal services to be rendered in

Question

Hudson Law Corporation received $5,500 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Service Revenue. At the end of the period, Hudson determines that $3,000 of the legal services have been rendered. The appropriate adjusting journal entry to be made at the end of the period is:

(A)debit Unearned Service Revenue, $3,000; credit Cash, $3,000.

(B)debit Unearned Service Revenue, $3,000; credit Service Revenue, $3,000.

(C)debit Unearned Service Revenue, $2,500; credit Service Revenue, $2,500.

(D)debit Service Revenue, $2,500; credit Unearned Service Revenue, $2,500.

(A)debit Unearned Service Revenue, $3,000; credit Cash, $3,000.

(B)debit Unearned Service Revenue, $3,000; credit Service Revenue, $3,000.

(C)debit Unearned Service Revenue, $2,500; credit Service Revenue, $2,500.

(D)debit Service Revenue, $2,500; credit Unearned Service Revenue, $2,500.

Explanation / Answer

A Journal entries for transactions of Hudson Law Corporation

Amount ($)

Narration

Date

Particulars

Lf/No

Dr

Cr

Cash A/c Dr

$         5,500

Revenue Received in advance for Legal services to be rendered

     To Unearned service revenue A/c

$                  5,500

Unearned Service Revenue A/c Dr

$         3,000

Services worth $ 3,000 were only rendered

     To Service Revenue A/c

$                  3,000

and hence the appropriate amount transferrred to service Revenue A/c

Balance in Unearned service Revenue A/c - 2500 $

A Journal entries for transactions of Hudson Law Corporation

Amount ($)

Narration

Date

Particulars

Lf/No

Dr

Cr

Cash A/c Dr

$         5,500

Revenue Received in advance for Legal services to be rendered

     To Unearned service revenue A/c

$                  5,500

Unearned Service Revenue A/c Dr

$         3,000

Services worth $ 3,000 were only rendered

     To Service Revenue A/c

$                  3,000

and hence the appropriate amount transferrred to service Revenue A/c

Balance in Unearned service Revenue A/c - 2500 $

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