Final Answer:
Alex's journal entry for the 90-minute massage for Jane would be:
Debit: Massage Revenue $112.50 (1.5 hours x $75 per hour)
Debit: Travel Revenue $37.50 (0.75 hours x $50 per hour)
Credit: Unearned Revenue $150.00 (Total payment received in advance)
Step-by-step explanation:
For the 90-minute massage session, Alex would record a debit entry of $112.50 for Massage Revenue, calculated by multiplying the duration of the massage (1.5 hours) by the rate charged per hour ($75). Additionally, a debit entry of $37.50 for Travel Revenue would be recorded, representing 45 minutes of travel time at the rate of $50 per hour. The total payment received in advance from Jane for the massage would be credited as Unearned Revenue, amounting to $150.00.
The breakdown of the journal entries reflects the revenue recognition for both the massage service and travel time. The debits represent the earned revenue for the respective services provided by Alex, while the credit entry recognizes the amount received in advance from the client. This accounting approach ensures that revenue is recognized in the financial records as services are rendered, aligning with the matching principle in accounting.
In summary, the journal entries capture the financial transactions associated with Alex's massage services, accounting for both the duration of the massage and the travel time. The entries follow sound accounting principles, providing a clear record of the revenue earned and the corresponding advance payment received.