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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 Summary

Journal entries and unearned revenue are discussed.

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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 ...

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