The balance in the unearned fees account, before adjustment at the end of the year, is $97,770. Of these fees, $39,750 have been earned. In addition, $24,650 of fees have been earned but have not been billed.

Journalize the adjusting entries;

(a) to adjust the unearned fees account and

(b) to record the accrued fees.

Question

Business

Anne Downs

31 July, 15:36

The balance in the unearned fees account, before adjustment at the end of the year, is $97,770. Of these fees, $39,750 have been earned. In addition, $24,650 of fees have been earned but have not been billed.

Journalize the adjusting entries;

(a) to adjust the unearned fees account and

(b) to record the accrued fees.

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Answers (1)

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Mccullough · Answer 1

a) For the amount earned and billed,

Debit Unearned fees $39,750

Credit Service revenue $39,750

b) To recognize the accrued or unbilled revenue that has been earned,

Debit Unbilled receivable $24,650

Credit Service revenue $24,650

Explanation:

When fees are collected in advance, the entries required are a debit to cash account and a credit to unearned fees.

As the revenue is earned through the performance of the service, the entries required are debit to unearned fees and a credit to service fee.

When revenue is earned but unbilled, the entries required are

Debit Unbilled receivable

Credit Service revenue