Ask Experts Questions for FREE Help !
Ask

how would I journalize unearned service revenue still unearned?

Asked Feb 17, 2011, 03:41 PM — 3 Answers

3 Answers
pready's Avatar
pready Posts: 2,666, Reputation: 887
Ultra Member
 
#2

Feb 18, 2011, 06:58 AM
When you receive money for a service to be performed later the journal entry will be:
Debit Cash for the amount received
Credit Unearned Service Revenue

After you provide the service the journal entry will be:
Debit Unearned service Revenue for the amount earned
Credit Service Revenue for the amount earned.

A prime example is for a magazine subscription because you pay for your magazine in advance for a certain time frame.

From your question I take it that you are given an amount of Unearned Revenue at the beginning of an accounting period and another amount at the end of an accounting period. The difference between the two amounts is the amount of Unearned Revenue that has been Earned, so you need to do an adjusting entry to bring your Unearned balance to the actual Unearned balance.

An example you have unearned advertising revenue of $1,000 and at the end of the period you still have $200 of unearned revenue. First you need to calculate how much unearned revenue is earned during the period. So $1,000 - 200 = $800 of unearned revenue that has been earned. Now that you know how much unearned revenue was earned during the period you can now do the adjusting entry to bring your unearned account balance from the $1,000 balance to the actual balance of $200. Your adjusting entry will be:
Debit Unearned Advertising Revenue for $800
Credit Advertising Revenue for $800
Helpful  (1)
csan1098's Avatar
csan1098 Posts: 2, Reputation: 10
Junior Member
 
#3

Sep 16, 2011, 06:25 PM
How do I post this in an adjusted trial balance?
Helpful
pready's Avatar
pready Posts: 2,666, Reputation: 887
Ultra Member
 
#4

Sep 17, 2011, 06:56 AM
Your adjusting entry will be:
Debit Unearned Revenue
Credit Earned Revenue

This is to get your unearned revenue that is earned during the period that has not been previously recorded as earned revenue.

The adjusted trial balance is done after your adusting entries have been made and is done to make sure your credit account balances are in balance with your debit account balances.
Helpful

Not your question? Ask your question View similar questions

 
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Add your answer here.

Remove Text Formatting

Undo
Redo
 
Decrease Size
Increase Size
Bold
Italic
Underline
Align Left
Align Center
Align Right
Ordered List
Unordered List
Decrease Indent
Increase Indent
Insert Email Link
Wrap [QUOTE] tags around selected text
Wrap [CODE] tags around selected text
Wrap [HTML] tags around selected text
Wrap [PHP] tags around selected text
Wrap [YOUTUBE] tags around selected text
Notification Type:



Check out some similar questions!

Unearned Service Revenue STill Unearned. [ 5 Answers ]

If the Trial balance says Unearned Service Revenue Cr. 12,560 The adjusting entry says Unearned Service Revenue still unearned, $800, how do I enter this?

Unearned service revenue still unearned is it a debit or credit [ 2 Answers ]

Prepaid rent still in force $400 but on the trial balance sheet it states prepaid rent 2,700 do I subtract -debit 400 or credit 400

Unearned Service Revenue still Unearned journal Entry [ 1 Answers ]

I have unearned service revenue still unearned in the amount of 6,500 although my trial balance reflect $8,900. To make a journal entry would this be correct. Unearned Service Revenue 2400 Service Revenue 2400

Unearned service revenue [ 1 Answers ]

Unearned service revenue still unearned


View more Accounting questions Search