Question

Near the end of the current fiscal year, Southeastern University, a governmental university, collected tuition and fees in the amount of $50,000 for classes that will be held early in the following fiscal year. The required journal entry to record this transaction is ________.

Answer 1

The required journal entry to record the transaction of collecting tuition and fees in advance is a debit to Unearned Revenue for $50,000 and a credit to Tuition and Fees for $50,000.

Step-by-step explanation:

The required journal entry to record the transaction of collecting tuition and fees in advance is as follows:

Debit - Unearned Revenue: $50,000
Credit - Tuition and Fees: $50,000

By recording this entry, Southeastern University acknowledges the receipt of $50,000 but defers recognizing it as revenue until the classes are held in the following fiscal year. At that time, the unearned revenue will be recognized as earned revenue.