An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. By the end of the year, $400 had been earned. Demonstrate what the correct adjusting entry should include by choosing the correct statement below.
A) Debit Accounts Receivable $400, Credit Unearned Revenue $400
B) Debit Unearned Revenue $400, Credit Service Revenue $400
C) Debit Unearned Revenue $1,000, Credit Service Revenue $1,000
D) Debit Service Revenue $1,000, Credit Unearned Revenue $1,000