## Answers

**ANSWER-OPTION D**

**EXPLANATION**

**FIRST ENTRY ON DEC 1 WILL BE CASH A/C DEBIT BY 10200 TO REVENUE A/C CREDIT BY 10200**

**SECOND ENTRY WILL BE DONE ON DEC 31 AS A ADJUSTING ENTRY THAT WILL BE REVENUE A/C DEBIT BY 6800{(10200/3)*2} TO UNEARNED INCOME A/C CREDIT BY 6800.**

**THESE TWO ENTRY WILL INCREASE A CASH BY 3400 AND REVENUE BY 3400. AND WE KNOW THAT CASH IS ASSET AND REVENUE BE THE PART OF EQUITY THEREFORE THERE WILL BE INCREASE IN ASSET AND STOCKHOLDERS' EQUITY BY 3400.**

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