Exercise 8-69 (Algorithmic) Unearned Revenue Long Beach Exterminators signed a $2,140-per-month contract on November 1, 2019, to provide pest control services to rental units owned by Palmdale Estates. Long Beach received 3 months' service fees in advance, on signing the contract. Required: 1. Prepare Long Beach's journal entry to record the cash receipt for the first 3 months. Nov. 1 Cash Unearned Sales Revenue (Record receipt of payment for services not yet performed) 6,420 6,420 Feedback Check My Work 1. Revenues are recognizes when earned. We talked about this in Chapter 5. 2. Prepare Long Beach's adjusting entry at December 31, 2019. Dec. 31 Unearned Sales Revenue Sales Revenue 2,140 X 2,140 X (Record recognition of revenue) Check My Work 2. Revenue is not recorded until earned. 3. Conceptual Connection: How would the advance payment [account(s) and amount(s)] be reported in Long Beach's December 31, 2019, balance sheet? 4,280 X would appear among Long Beach's current liabilities Unearned sales revenue in the amount of $ How would the advance payment [account(s) and amount(s)] be reported in Palmdale Estates' December 31, 2019, balance sheet? A prepaid asset in the amount of $ 4,280 X would appear among Palmdale Estates' current assets Feedback Check My Work 3. Consider the accounts used in the journal entry and determine how these accounts will be reflected in the financial statements. Feedback Check My Work Partially correct