On December 1, Year 1, Jack's Snow Removal Company received $10,200 of cash in advance from a customer and promised to provide services for that customer during the months of December, January, and February. How will the Year 1 year-end adjustment to recognize the partial expiration of the contract impact the elements of the financial statements model?
A. Total assets will increase by $3400
B. Total liabilities will increase by $3400
C. Equity will increase by $3400
D. Equity will increase by $3400 and Total assets will increase by $3400
Answer: C
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