On June 1, 2016, Enne Brahtz Corporation received $3,600 as advance payment for 12 months' advertising. The receipt was recorded as a credit to Unearned Fees. What adjusting entry is required on December 31, 2016?

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andromache andromache · Answer 1 · 2020-09-05T03:24:17+02:00

Answer:

Unearned Fees ($3,600 × 6 months ÷ 12 months) $1,800

To Advertising revenue $1,800

(Being the adjusting entry is recorded)

Explanation:

The adjusting entry is shown below;

Unearned Fees ($3,600 × 6 months ÷ 12 months) $1,800

To Advertising revenue $1,800

(Being the adjusting entry is recorded)

Here we debited the unearned fees as it decreased the liability and credited the advertising revenue as it increased the revenue account

The six months could be computed from June 1 to December 31

Tundexi Tundexi · Answer 2 · 2022-01-25T11:24:43+01:00

The adjusting entry for the transaction includes Debit to Unearned Fees $1,800 and Credit to Advertising revenue $1,800.

Date Account titles and Explanation Debit Credit

Unearned Fees $1,800

($3,600 × 6 months/ 12 months)

To Advertising revenue $1,800

(Being the adjusting entry is recorded)

In conclusion, the adjusting entry for the transaction includes Debit to Unearned Fees $1,800 and Credit to Advertising revenue $1,800.