How should I calculate and record the adjusting entry presented below in the trial balance on December 31,2005:

On November 1, 2005 a company agreed to do a six-month course for a client, with a monthly fee of $2,200. The client paid the first five months' fees in advance.
When the cash was received, the Unearned Extension Fees account was credited.

Thank you

Paula

randyhu

That is correct.....it is unearned until the calender date has passed.

bhet

dr. unearned extension fees 2200
cr. earned extension fees 2200

adjusting entry should be made to the extent of the earned extension fee. since only 1 month has passed only the 1 month expired should be acounted as earned

CaptainForest

It would either be:

Dr. Expense 4,400
Cr. Prepaid 4,400

Or
Dr. Unearned Revenue 4,400
Cr. Revenue 4,400

2 months x 2,200 per month = 4,400

I am unclear as to who you are needing the JE for.