Decca Design Ltd. is a database design company. Its clients pay a $1,000 deposit and are billed for the remainder of the contract once the database is complete. All existing contracts were entered into in the current year.

a. Journalize the adjusting entry to record the revenue earned at year-end.
b. Assume that Decca Design Ltd. has only these three contracts. What are the balances in the unearned revenue, accounts receivable, and revenue accounts at year-end?

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Completion at Contract #1 | $12,800 Contract #2 | $ 6,250 Contract #3 | $14.900 Total Value Dec. 31 year-end 25% | 6096 | 90%