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Baylor Service Corp. redeemed $1,000 of gift cards that customers used to pay for services that were performed by the company. The related adjusting entry would include a debit to: A. Accounts Receivable and a credit to Service Revenue. B. Unearned Revenue and a credit to Service Revenue. C. Cash and a credit to Service Revenue. D. Cash and a credit to Unearned Revenue.

Respuesta :

Answer:

B. Unearned Revenue and a credit to Service Revenue.

Explanation:

The adjusting entry is given below:

Unearned revenue $1,000

         To Service revenue $1,000

(Being service revenue is recorded)

Here unearned revenue is debited as it decreased the liabilities and credited the service revenue as it increased the revenue

Therefore the option b is correct

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