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    lchoz's Avatar
    lchoz Posts: 1, Reputation: 1
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    #1

    Feb 27, 2014, 10:07 PM
    Tao Co. receives $10,000 cash in advance for 4 months of legal services on October 1,
    Tao Co. receives $10,000 cash in advance for 4 months of legal services on October 1, 2013, and records it by debiting Cash and crediting Unearned Revenue both for $10,000. It is now December 31, 2013, and Tao has provided legal services as planned. What adjusting entry should Tao make to account for the work performed from October 1 through December 31, 2013?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Mar 3, 2014, 07:39 AM
    Your adjusting entry will be for months Oct, Nov, and Dec. You have to take your initial receipt of $10,000 times 3/4 to get your amount for 3 months of legal services provided.

    Your accounts will be Unearned Revenue and Earned Revenue.
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