Revenue Recognition: Sparrow Film Productions (SPF) wished toexpand its production facilities so it borrowed $10,000,000 fromFirst National Bank early in 2018. As a condition of making thisloan, the bank requires that the business maintain a current ratioof at least 2 to 1. Business has been pretty good in 2018, but thecost of the expansion has brought the current ratio down below thetarget. In fact, on December 15, Jack Sparrow, the owner of SPFestimates that the year-end current ratio will be only 1.90 to 1.(A little short of the bank's requirements.) Jerry quickly looksthrough the signed contracts and sees an unpcoming project thatwill be started and completed in February 2019 for $500,000. Jerryis thinking about recording the $500,000 as revenue in 2018 insteadof in 2019. If he does this, the current ratio at the end of 2018will be above the required current ratio of 2 to 1. Required: 1.Assume Jerry decides to include the $500,000 as 2018 revenue.Journalize the transaction on 12/31 assuming the cash will becollected in February of 2019. 2. Explain why it would be unethicalfor Jerry to record the February revenue in 2018. Identify theaccounting principle(s) relevant to this situation and give thereasons for your conclusion. This part should be 3-4 sentences. 3.Cite all references used including url or page number (even if youuse the textbook). 4. If you were advising Jerry, what else couldJerry do to improve his current ratio that would be acceptableunder ethical standards? (2-3 sentences)