The Effects of the Advance Payment (Receipt) on Lark Bell's Year 1 Financial Statements are:
                     Balance Sheet                                                                                                                       
               Assets =  Liabilities                                  + Equity  
Cash +$36,000 = Unearned revenue +$15,000 + Service Revenue +$21,000 
                                  Income Statement                              Cash Flow
                      Revenue - Expense = Income                         Statement
Service Revenue +$21,000                                 Cash inflow +$36,000 OA
In Year 1, the Assets (Cash) will increase by $36,000.  There is a corresponding increase in Liabilities (Unearned Revenue) of $15,000 and an increase in Equity (Service Revenue) of $21,000.
Thus, the amount of revenue that Bell would recognize on the Year 2 income statement from this transaction in Year 1 is $15,000.  This covers 5 months from January to May.
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