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I need help recording this journal entry?
Twenty additional kayakers pay $3,600 ($180 each), in addition to the $10,400 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.
Debit Credit
Cash 3,600
(Part I cannot figure out) 10,400
Service Revenue (Clinic) 14,000
I got the whole entry but the second entry under Cash I cannot figure. Please help! Thank You
2 Answers
- ThorLv 57 years agoFavorite Answer
No not revenue, it looks like an advance payment. This should go into unearned revenue under liabilities. The cash part is right though.
debit cash 3600
credit unearned revenue 3600
I am assuming this is a monthly ledger so you would simply ignore the 10,400 if that was for the previous month. If this is not the case it would be as follows:
debit cash 10,400
credit unearned revenue 10400
debit cash 3600
credit unearned revenue 3600
- ?Lv 77 years ago
When the $10,400 was paid in advance, the entry should have been:
Dr Cash 10,400
Cr Unearned Revenue 10,400
Now, on the day of the clinic, all revenues have been earned, so you can get rid of the unearned portion with a debit.
Dr Cash 3,600
Dr Unearned Revenue 10,400
Cr Service Revenue 14,000
Source(s): Accounting Fan
