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Question - The company provides refrigerator support services for clients. They received £8,000 from a client who paid for 6 months for the services in advance on October 1st. The service is provided on October 1st. In error, the accountant recognized all amounts that were paidas Service revenue. The company has a Dec 31st, year-end and records adjusting entry annually. The B/S method is used to record adjusting entries.
1. What is the amount of the adjusting entry made on the B/S date?
2. Write the journal entry on the B/S date.
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