Question

Sally co. received payment in june for services to be performed in july for $500, what journal entry should she record at the end of july?
a. cash $500 unearned revenue $500
b. accounts receivable $500 unearned revenue $500
c. unearned revenue $500 service revenue $500
d. cash $500 service revenue $500

Answer 1

Sally here received the cash for the services to be performed in July. Thus, she has received cash for the unearned revenue.

The journal entry to record the cash received for unearned revenue is -

Cash Dr... XXX

Unearned revenue Cr. XXX

Thus, the correct entry here will be -

Cash Dr. $ 500

Unearned Revenue Cr. $ 500

The correct option is a. Cash $ 500 Unearned revenue $ 500.