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Question: On December 31, Morgan Company received a statement from its book distributor notifying Morgan that the company had earned $50,000 for its December royalties. This amount will be paid to Morgan next year in February. Because December 31 is the end of Morgan's fiscal year, the company makes adjusting entries at that time. Which debit or credit is correctly included in the adjusting journal entry necessary on December 31 to record the royalty revenue that Morgan has earned but not yet received?
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