Question

Software Solutions was hired by Jones Company on December 1 to install and updated software. The total entire amount of $1,800 in revenues is to be paid to us by Jones Company when the job is completed the following January 31. As of December 31, we have completed one half of the software installation and updates. On December 31, Software Solutions makes the following entry to adjust for the revenues earned during December:

Answer 1

Answer:

Software solutions was hired to install and update software.

When job was completed,

Total revenue paid by Jones company = $1,800

As of December 31,

software installation completed = 1/2

Service revenue = 0.5 × $1,800

                            = $900

Therefore, the adjusted journal entry for the revenue is as follows:

On 31st December,

Accounts receivable A/c      Dr. $900

To Service revenue                               $900

(To record revenue earned)