Answer:
cash 15,000 debit
account receivables 15,000 credit
cash 3,000 debit
A/R 5,000 debit
service revenue 8,000 credit
COGS 6,800 debit
Merchandise 6,800 credit
Cash 4,000 debit
A/R 4,000 credit
Cash 2,500 debit
*unearned revenue 2,500 credit
**utilties payable 800 debit
cash 800 credit
salaries expense 3,500 debit
cash 3,500 debit
***prepaid expene 375 debit
prepaid insurance 1,125 debit
cash 1,500 credit
repairs expense 700 debit
cash 700 credit
utilities expense 900 debit
utilities payable 900 credit
Explanation:
We will record following the debit = credit rule
* It will be considered unearned revenue as we didn'0t perform the services we have the obligation to do so therefore, it is a liability.
**as the expense was recorded previously a payable was created to recognize the obligation to pay our utilities. Therefore, we write-off the payable
*** 1,500 is the full contract value for 4 months:
1,500 / 4 = 375 per month
one most is declared as expense and the remainder as prepaid.
