Question

Knowledge Check 03 On March 1, a designer receives a $7,500 check in advance from a customer for design services to be provided after the customer chose a color scheme for the first floor of her house. Prepare the March 1 journal entry for the designer by selecting the account names and dollar amounts from the drop-down menus.

Answer 1

Answer:

Dr Cash 7,500

Cr Unearned Revenue 7,500

Explanation:

Preparation of the March 1 journal entry for the designer

Since we were told that On March 1 that the designer receives a sum of $7,500 which was check in advance from the designer customer this means that the transaction will be recorded by Debiting Cash with the sum of $7,500 and Crediting Unearned Revenue with the same amount of $7,500

Dr Cash 7,500

Cr Unearned Revenue 7,500