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Talja [164]
3 years ago
7

NorthEast Airlines received payment from a customer on December 1, 2018, for a round trip airline ticket from Baltimore to Orlan

do in the amount of $1,000. The flight from Baltimore to Orlando occurs on December 27, 2018, and the return flight to Baltimore is on January 10, 2019. What is included in the adjusting entry needed on December 31 to record earned revenue from this transaction?
Social Studies
1 answer:
malfutka [58]3 years ago
6 0

Answer:

Debit to Air Traffic Liability , $500.

Explanation:

Air Traffic Liability is an important key term for airline officials and even investors to know. It involves money the airline has collected, but service that has yet to be provided.

We had two flights December 27, 2018, and the return flight to Baltimore is on January 10, 2019. But, the customer paid on December 1, 2018. This imples that we need to adjust the entry on December 31 for $500, because the service will be fully provided in 2019.

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