Question

On December​ 1, 2019,​ Carrie's Day Care receives in advance for an agreement to care for​ Susan's children for the months of​ December, January, and February.​ Carrie's Day Care will make an adjusting entry on December​ 31, 2019​ to:

Answer 1

Answer and Explanation:

Since in the question it is mentioned that the Carrie day care received an advance for an agreement made to care for Susan child for the three months i.e. December, January, and February.

So for this, the unearned revenue is debited for $500 and the same is to be considered

Working note:

Amount of Revenue earned = Advance amount × 1 ÷ (From December to February)

= $1,500 × 1 ÷ 3

= $500