Question

company is in its first month of operations. On January 15, the company receives $600 from customers who will receive 10 voice lessons ($60 per lesson). As of January 31, the company has provided 8 voice lessons. What adjusting entry would be made at the end of January

Answer 1

Explanation:

The journal entry at the time of receiving is

Cash A/c Dr $600

      To Unearned revenue A/c $600

(Being the cash is received in advance)

Now the adjusting entry is

Unearned revenue A/c Dr $480

          To Service revenue A/c $480

(Being the revenue is recorded)

The computation is shown below:

= Number of voice lessons × per lesson

= 8 × $60

= $480