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    Journal Entries and Unearned Revenue

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    Your client signs a 12-month rental agreement with your company on 1/1/07
    for $12,000. What entry is required:

    1. on 1/1/07?

    2. on 1/31/07?

    3. What type of account is "unearned revenue"?

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    Solution Preview

    1. on 1/1/07?
    Debit Credit
    Cash A/c Dr. 12000
    Unearned Revenue A/c 12000
    (Rent received in advance)

    2. on 1/31/07?

    Unearned Revenue A/c Dr. 12000

    Revenue A/c 12000
    (At the end of 12 month its recognized as revenue)

    3. What type of account is "unearned revenue"?

    Revenue recognition: Revenue is recognized when both of ...

    Solution Summary

    Journal entries and unearned revenue are discussed.