ADJUSTING ENTRY PRACTICE CLASSWORK For each separate case below, follow the 3step process for adjusting the unearned revenue liability a 31. Step 1: Determine what the current account balance equals Step 2: Determine what the current account balance should equal Step 3: Record the December 31 entry from Step 1 to Step 2 Assume no other adjusting entries are made during the year. a. Unearned Rent Revenue. The Krug Company collected $6,000 rent in advance on November 1, det crediting Unearned Rent Revenue. The tenant was paying 12 months' rent in advance and occupancy Step 1: Unearned Rent Revenue equals Step 2: Unearned Rent Revenue at Year-End should equal Step 3: Required Adjusting Journal Entry: b. Unearned Services Revenue. The company charges $75 per month to spray a house for insects. A l on October 1 in advance for four treatments, which was recorded with a debit to Cash and a credit to Revenue. At year-end, the company has applied three treatments for the customer. Step 1: Unearned Services Revenue equals Step 2: Unearned Services Revenue at Year-End should eq _ Step 3: Required Adjusting Journal Entry: c. Unearned Rent Revenue. On September 1, a client paid the company $24,000 cash for six months (the client leased a building and took occupancy immediately). The company recorded the cash as Uni Revenue. Step 1: Unearned Rent Revenue equals Step 2: Unearned Rent Revenue at Year-End should equal Step 3: Required Adjusting Journal Entry: :lI