Question - Squeaky Shine provides car washing services in Jersey City, New Jersey. A three-month pass for automatic car wash sells for $50, which entitles the customer for an unlimited number of car washes during the contract period. Squeaky Shine estimates that pass holders wash their cars equally throughout the three-month period. On December 1st, customers purchased $1,740 of the three-month passes, with purchases of the passes occurring evenly throughout December.
Required: Prepare the journal entries that Squeaky Shine would record on December 1 and on December 31, 2016, with respect to this transaction.