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    Lmnstar's Avatar
    Lmnstar Posts: 7, Reputation: 1
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    #1

    Jul 5, 2007, 08:51 AM
    Adjusting and Reclassifying entries
    Can someone help me with this I would like to know what entry should I make for this problem

    If the bal in accts payable is 122,400 and included in the amount is $10,400 of advance deposits made by Brian Co. on future purchases.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Jul 5, 2007, 12:25 PM
    Accounts Payable 122,400

    But of that amount 10,400 should not be there. Why not? Because it is not money you owe. It is money that someone has given you as a deposit, which is therefore unearned revenue.

    Dr. Unearned Revenue 10,400
    Cr. AP 10,400
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