Question

Browning, Inc., collects cash from customers in advance and from other customers after the sale.

Read the requirement
a. Journalize Browning earning service revenue of $15,000 on account and then collecting $10,000 on account. (Record debits first, then credits. Exclude explanations from any jounal entries.)
Start by recording Browning earning $15,000 of service revenue on account.
Journl Entry
Date Accounts Debit Credit
2018
Journalize the followibg transactions for Browning:
a. Accrued revenue. Some customers pay Browning after Browning has performed the service for the customer. During 2018, Browning performed services for $15,000 on account and later received cash of $10,000 on account from these customers.
b. Unearned revenue. A few customers pay Browning in advance, and Browning later performs the service for the customer. During 2018, Browning collected $2,000 cash in advance and later earned $1,500 of this amount.

Answer 1

Answer and Explanation:

The journal entries are shown below:

a)

i) Accounts receivable $15,000

To Service revenue $15,000

(Being the service revenue on account is recorded)

ii) Cash $10,000

To Accounts receivable $10,000

(Being cash received is recorded)

b)

i) Cash $2,000

To Unearned Service revenue $2,000

(being cash received is recorded)

ii) Unearned Service revenue $1,500

To Service revenue $1,500

(being unearned service revenue is recorded)