On December 12, 2018, Pace Electronics received $43,200 from a customer toward a cash sale of $432,000 of diodes to be completed on January 16, 2019. What journal entries should Pace record on December 12 and January 16? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Business

Matthew Fields

27 February, 12:56

On December 12, 2018, Pace Electronics received $43,200 from a customer toward a cash sale of $432,000 of diodes to be completed on January 16, 2019. What journal entries should Pace record on December 12 and January 16? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Iliana Lowery · Answer 1

cash 43,200

unearned services 43,200

to reord payment in advance

account receivables 388,800

unearned services 43,200

service revenue 432,000

to record completion of diodes request of December 12th

Explanation:

the accounting will match revenues with the time at they occur.

Also it will follow conservatism principles and do not recognize revenue until is secure.

Because, the customer may cancel the request it will not recognize any revenue until the goods are delviered andaccepted from the customer.

That occurs on January 16th so hthe revenue will be in that entry.

For Deceber 12th the reception of cash will be against unearned revenue as on that date, the company takes the obligation to do the job.