In a journal entry for a company that has contracted for services and paid a partial amount for such services how would the journal entry be entered.

I thought it would be as Cash - Debit, Unearned Income - Debit, Account Receivable - Credit.

For example: If the contract is for 3 months at 2400 per month and I was paid in advance for the first 2 months $4800.

Thanks,

When you received the money, you would:

Dr. Cash 4,800
Cr. Unearned Revenue 4,800

Why? Because unearned revenue is a LIABILITY account. You have just gotten money, don't nothing for it and therefore must pay it back (theoretically).

After the first month, you have now earned 2,400 of that 4,800 so you can decrease that liability instead of sending them a bill for it.

Dr. Unearned Revenue 2,400
Cr. Revenue 2,400

What the journal entries for unearned fees on July 31,2003,rm750

teruterubozu, please always start your own thread for your post and not piggy-back into a two-year old thread -- this just confuses people.

It also cannot be answered without knowing other information. The only account implied in that statement is unearned fees, but nothing about what other account might be used. It could be someone is paying up front now or it's an adjusting entry... can't tell from that.