three - fourths of the work related to $13,000 of cash received in advance was performed this period. note…
three - fourths of the work related to $13,000 of cash received in advance was performed this period. note: enter debits before credits. transaction general journal debit credit d
Answer
Explanation:
Step1: Identify the revenue recognition
When three - fourths of the work related to the cash received in advance is performed, we need to recognize that portion as revenue. The amount of cash received in advance is $13,000. The amount of revenue to be recognized is $\frac{3}{4}\times13000 = 9750$.
Step2: Determine the journal entry
The liability (Unearned Revenue) decreases (debit) and the revenue (Service Revenue) increases (credit). Debit Unearned Revenue for $9750$ and credit Service Revenue for $9750$.
Answer:
| Transaction | General Journal | Debit | Credit |
|---|---|---|---|
| d | Unearned Revenue | $9750$ | |
| Service Revenue | $9750$ |