I will try to answer the best I can, anyone can correct me if I am wrong.

I think that the situation is that you are a company that is hiring someone to paint some shizzle for you. The total painting that will done for you will cost $15,000. When the contract is signed, you make a $5,000 payment as a down payment. However at the end of the period (year), only 20% of the work is actually done. So here's what I would say...

When you sign the contract, you owe that money so I would record the full liability up front as such

Prepaid Painting Expense $15,000
Painting Expense Payable $15,000

When you pay that $5,000 downpayment, you would reduce that liability as such.

Painting Expense Payable $5,000
Cash $5,000

Or you could combine the two entries as such

Prepaid Painting Expense $15,000
Painting Expense Payable $10,000
Cash $5,000

However, at the end of the period (year) only 20% of the work is done so you would need to accrue that 20% of expenses as follows

Painting Expense (15,000 * .2) 3,000
Prepaid Painting Expense 3,000

So assuming that the question is asking about this end of period accrual entry the answer would be C.

That's what I would say but I am not sure if I really should record the full liability up front when the contract is signed because I guess the argument could be made that you do not owe anything, even with a contract, unless the work is performed. However, even with this method, you could accrue the liability with the prepaid asset and do the same entry so I still think that the answer would be C.

for 20% work completed C is the right answer.

well i agree with large cat because it seems that answer is C is the right option!