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27 October, 14:43

An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. By the end of the year, $400 has been earned. What is the correct adjusting entry that should be include?

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  1. 27 October, 14:54
    0
    The answer is "$400"

    Explanation:

    Given:

    advance payment = $ 1,000

    by the end of year he earned = $ 400

    So, the total eared value is $ 400 because it is the Debit unearned income.
  2. 27 October, 18:06
    0
    Debit unearned revenues for $400

    Explanation:

    Adjusting entries are journal entries made to record revenues and expenses accounts. These entries are made at the end of an accounting cycle.

    Payment received for services on December 1 that was recorded as a liability = $1,000

    Amount earned by the end of the year = $400

    Therefore,

    adjusting entry: Debit unearned revenues for $400 so that expenses matched to the accounting period in which the revenue paying for them is earned.
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Home » Business » An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. By the end of the year, $400 has been earned. What is the correct adjusting entry that should be include?
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