shakedown
Nov 12, 2009, 11:29 PM
What are the journal entries required for unearned revenue that includes expenses and income. For example, a customer prepays for service that will have unknown expenses associated with the service. So far I have the following:
Dr Cash 25,000.00
Cr Unearned revenue 25,000.00
To record the initial sale
The unearned revenue becomes realizable three months after the prepayment because all services were rendered. Expenses incurred during this three months totaled 18,000.00. Expenses do not have the ability to be forecasted. What are the adjusting entries necessary when the services are rendered and the job is complete?
Dr Cash 25,000.00
Cr Unearned revenue 25,000.00
To record the initial sale
The unearned revenue becomes realizable three months after the prepayment because all services were rendered. Expenses incurred during this three months totaled 18,000.00. Expenses do not have the ability to be forecasted. What are the adjusting entries necessary when the services are rendered and the job is complete?