Answer:
b. $2,500, $3,500
Explanation:
Amount collected in advance will be recognized as a liability until the revenue is earned. Entries are posted between the cash account and deferred revenue account on collection of cash.
Given that he company collected $6,000 in advance payments from customers for 12-month gym memberships on June 1, 2018.
Debit Cash account $6,000
Credit Unearned revenue $6,000
After 7 months ( between 1 June and 31 December 2018),
Revenue earned = 7/12 × $6,000 = $3,500
On December 31, 2018,
Debit Unearned revenue $3,500
Credit Membership Revenue $3,500
Balance in unearned revenue accounts = $6,000 - $3,500 = $2,500
Balance in Membership revenue = $3,500
