On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a marketing campaign effective from May 1 of the current year to April 30 of the following year. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the fees had been earned. Assuming adjustments are only made at year-end, the adjusting entry on December 31 would be:
A. A debit to Fees Earned and a credit to Unearned Fees for $500.
B. A debit to Unearned Fees and a credit to Cash for $500.
C. A debit to Fees Earned and a credit to Cash for $500.
D. A debit to Unearned Fees and a credit to Fees Earned for $1,000.
E. A debit to Fees Earned and a credit to Cash for $1,000.
Answer: D
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