Question

On December 1, $11,650 was received for a service contract to be performed from December 1 through April 30. b Assuming the work is performed evenly throughout the contract period, prepare the adjusting journal entry on December 31.

Required:
Record journal entries for the above transactions. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Journal entry

Date Account Title and Explanation Debit Credit

Dec 1 Cash $11650

Unearned fees $11650

(To record unearned fees)

Dec 31 Unearned fees (11650/5) $2330

Fees earned $2330

(To record adjusting entry)