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Unearned service revenue still unearned is it a debit or credit
Asked Sep 25, 2010, 08:07 PM
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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 |
2 Answers
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| Unearned Revenue is a Liability and liabilities have a normal credit balance. Prepaid Rent is a Current Asset and assets have a normal debit balance. When you decrease a liability you debit the account and when you decrease an asset you credit the account. | ||||
| csan1098 (Sep 16, 2011 06:31 PM):
Source: |
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| You did not give enough informaation in your problem to determine what to do. From the information provided by you, you have $400 in Prepaid rent and you paid $2,300 in advance for rent. The journal entry to record this is: Ebit Prepaid Rent for 2,300 Credit Cash for 2,300 You do not do anything with the $400 until you have used the rent. Obviously you did not read your problem and did not look at all the information provided in the problem! | ||||
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