Question

If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is

Answer 1

e. Debit Unearned Legal Fees and credit Legal Fees Earned.

Step-by-step explanation:

As we know that unearned legal fees contain a credit balance as it is a liability

Now if the portion of an unearned legal fees is earned so the portion of it would be debited and on the other side the legal fees is credited

The journal entry is shown below:

Unearned legal fees Dr XXXXX

To Legal fees earned XXXXX

(Being the adjusting entry is passed)

Hence, the correct option is e.