Final answer:
No adjusting entry is required on December 31, 2024, for Pastina's deferred sales revenue of $3,400 because the revenue is still unearned until the delivery of spaghetti in January 2025. The amount is reported as a liability as 'Unearned Revenue' or 'Deferred Revenue' on the balance sheet.
Step-by-step explanation:
The student's question pertains to the necessary adjusting entry for deferred sales revenue that was recorded in December for a product (spaghetti) to be delivered in January 2025. Since the revenue was received in advance, it was correctly recorded as a liability.
The adjusting entry, however, would not occur until January 2025, when the spaghetti is delivered. At that time, Pastina would need to recognize the revenue earned by debiting 'Deferred Sales Revenue' and crediting 'Sales Revenue'.
No adjusting entry is needed on December 31, 2024, as the revenue is still unearned at that point. Should the financial statements be required on December 31, 2024, the amount would be reported as a liability under Unearned Revenue or Deferred Revenue on the balance sheet.