diff --git a/activesupport/CHANGELOG b/activesupport/CHANGELOG
index 9b0a84678a..87ec6f2a2c 100644
--- a/activesupport/CHANGELOG
+++ b/activesupport/CHANGELOG
@@ -1,5 +1,8 @@
 *Edge*
 
+* Changed the default ActiveSupport.use_standard_json_time_format from false to true and
+ActiveSupport.escape_html_entities_in_json from true to false to match previously announced Rails 3 defaults [DHH]
+
 * Added Object#presence that returns the object if it's #present? otherwise returns nil [DHH/Colin Kelley]
 
 * Add Enumerable#exclude? to bring parity to Enumerable#include? and avoid if !x.include?/else calls [DHH]
diff --git a/activesupport/lib/active_support/json/encoding.rb b/activesupport/lib/active_support/json/encoding.rb
index c8415d5449..8ba45f7ea2 100644
--- a/activesupport/lib/active_support/json/encoding.rb
+++ b/activesupport/lib/active_support/json/encoding.rb
@@ -114,7 +114,8 @@ module ActiveSupport
         end
       end
 
-      self.escape_html_entities_in_json = true
+      self.use_standard_json_time_format = true
+      self.escape_html_entities_in_json  = false
     end
 
     CircularReferenceError = Deprecation::DeprecatedConstantProxy.new('ActiveSupport::JSON::CircularReferenceError', Encoding::CircularReferenceError)
diff --git a/activesupport/lib/active_support/time_with_zone.rb b/activesupport/lib/active_support/time_with_zone.rb
index 6b554e7158..710dce78de 100644
--- a/activesupport/lib/active_support/time_with_zone.rb
+++ b/activesupport/lib/active_support/time_with_zone.rb
@@ -32,7 +32,6 @@ module ActiveSupport
   #   t.is_a?(Time)                         # => true
   #   t.is_a?(ActiveSupport::TimeWithZone)  # => true
   class TimeWithZone
-    
     def self.name
       'Time' # Report class name as 'Time' to thwart type checking
     end
@@ -114,9 +113,9 @@ module ActiveSupport
     end
     alias_method :iso8601, :xmlschema
 
-    # Coerces the date to a string for JSON encoding.
-    #
-    # ISO 8601 format is used if ActiveSupport::JSON::Encoding.use_standard_json_time_format is set.
+    # Coerces the date to a string for JSON encoding. The default format is ISO 8601. You can get
+    # %Y/%m/%d %H:%M:%S +offset style by setting ActiveSupport::JSON::Encoding.use_standard_json_time_format
+    # to false.
     #
     # ==== Examples
     #
diff --git a/railties/lib/rails/generators/rails/app/templates/config/initializers/new_rails_defaults.rb b/railties/lib/rails/generators/rails/app/templates/config/initializers/new_rails_defaults.rb
index 8ec3186c84..91a8fdb688 100644
--- a/railties/lib/rails/generators/rails/app/templates/config/initializers/new_rails_defaults.rb
+++ b/railties/lib/rails/generators/rails/app/templates/config/initializers/new_rails_defaults.rb
@@ -4,16 +4,6 @@
 # for Rails 3. You can remove this initializer when Rails 3 is released.
 
 if defined?(ActiveRecord)
-  # Include Active Record class name as root for JSON serialized output.
-  ActiveRecord::Base.include_root_in_json = true
-
   # Store the full class name (including module namespace) in STI type column.
   ActiveRecord::Base.store_full_sti_class = true
-end
-
-# Use ISO 8601 format for JSON serialized times and dates.
-ActiveSupport.use_standard_json_time_format = true
-
-# Don't escape HTML entities in JSON, leave that for the #json_escape helper.
-# if you're including raw json in an HTML page.
-ActiveSupport.escape_html_entities_in_json = false
\ No newline at end of file
+end
\ No newline at end of file