Answer:
D. Debit Deferred Revenue and credit Service Revenue for $12,000.
Explanation:
The money received in advance before the deliver of the service is recognized in the books by debiting cash account and crediting deferred revenue. As the service is earned, revenue is credited and deferred revenue debited.
Total amount collected = $90 × 400 = $36,000
Monthly revenue = 1/12 × $36,000 = $3,000
Revenue earned between September and December = 4 × $3,000
= $12,000
Entries required
D. Debit Deferred Revenue and credit Service Revenue for $12,000.