Final answer:
The student's question involves accounting and year-end adjustments. M&R Company needs to record a $3,100 service provided in December as revenue through an adjusting entry, even though payment is received in January. This follows accrual accounting principles for accurate year-end financial statements.
Step-by-step explanation:
To accounting practices at year-end. In this scenario, M&R Company has provided services in December, and those services have not yet been recorded as income because the customers have not paid. As these services are expected to be paid in January, following the company's year-end, the accounting treatment would involve recognizing the revenue in December through an adjusting journal entry. This is known as accrual accounting, and it means that the revenue from the services should be recorded in the same period the services were rendered, not when the payment is received.
For M&R Company, an adjusting entry to recognize the revenue in December would involve debiting Accounts Receivable and crediting Service Revenue with the amount of $3,100. This entry ensures that their financial statements accurately reflect the company's financial position and performance at year-end.