Question

plow drive way offers snow plowing services. customers pay three hundred dollars to have their driveways ploweded for the period december 1st - febuary 28. To be a customer of plow driveway customers must pay the 300 dollars by november 30th. As of december 1st, plow driveway recived a total of 15,000 dollars. Plow driveway prepares finacial statements monthly. On feburary 1st the balance on the unearned revenue account was 5,000 dollars. The February 28th adjusted journal entry would be

Answer 1

Adjusting Journal entry on 28^th February

Date	General journal	Debit	Credit
28-Feb	Unearned Service Revenue	$ 5,000.00
	Service Revenue		$ 5,000.00
	(Revenue for month of February earned)

Service revenue of February is earned and recorded. The balance on feb 1^st denotes unearned revenue for which service was completed in February month in full.

$15000 was received for three months of which $10000 was earned till Feb 1^st and rest is earned in February.