$1,000 of cash was received in advance of performing services. by the end of the period, $300 had not yet been earned. (the unearned revenue account was increased at the time of the initial cash receipt.) demonstrate the required adjusting journal entry by selecting from the choices below.

Explanation:

The adjusting entry is shown below:

Unearned revenue A/c Dr $700

        To service revenue A/c $700

(Being unearned revenue is adjusted)

The unearned revenue is computed below:

= Advanced cash received - unearned

= $1,000 - $300

= $700

To pass the adjusting entry we debited the unearned revenue account (current liability) and credited the revenue account

business modeling is correct

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