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bethofmary
Aug 30, 2009, 05:27 PM
On Sept. 8th A company received $10,000 cash from McBryan Construction Co. as advance payment on rental equipment.

My question is would that be a debit to cash and a credit to unearned rental fees or would the credit be rental fees earned.

morgaine300
Aug 30, 2009, 05:52 PM
If they've paid you in advance of providing anything, then you haven't yet earned anything. That's what we use that unearned account for - it's a liability because the service or goods is still due and as yet unearned.