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    ivsv's Avatar
    ivsv Posts: 5, Reputation: 1
    New Member
    		  
    #1

    Oct 10, 2008, 09:12 PM
    Prepare correcting entries
    Hello, I would like to check my answer for the following question:

    1. The purchase of $1200 of office equipment with a three-year useful life was debited to office supplies

    2. A customer was billed $175 for services provided. Accounts receivable was debited of $175 and Unearned Service Revenue was credit ed $175

    My answer:

    1. Office Equipment (Dr 1200)
    Office Supplies (Cr 1200)
    I'm not too sure do I have to include amortization Expense and Accumulated Amortization in the answer.

    2. Unearned Service Revenue (Dr 350)
    Accounts Receivable (Cr 175)
    Service Revenue (Cr 175)

    Thank you very much.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    Oct 18, 2008, 03:05 PM

    1. Looks correct. You will Depreciate the Equipment over 3yrs. You will need to know the salvage value and the method of Depreciation(SL, DDB, SYD, & so on).

    2. Debit Unearned Service Revenue for 175
    Credit Service Revenue for 175
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