Question

On March 1, a designer received a check for $7,500 from a customer for services to be provided after the customer chooses a color scheme for the first floor of her house. On July 31, the designer completed the design work for this customer.
Note: Enter debits before credits.
Date General Journal Debit Credit
July 31
Record entry Clear entry View general journal

Answer 1

Answer:

1.March 1

Dr Cash 7,500

Cr Unearned Revenue 7,500

2.July 31

Dr Unearned Revenue 7,500

C Design Services Revenue 7,500

Explanation:

1.Preparation of journal entry for March 1 journal entry

Based on the information given we were told that the designer receives the amount of $7,500 as a check in advance from a customer which means that the journal entry will be:

Dr Cash 7,500

Cr Unearned Revenue 7,500

2.Preparation of the July 31 journal entry.

Based on the information given we were told that the designer completed the design work for this customer which means that the journal entry will be:

July 31

Dr Unearned Revenue 7,500

C Design Services Revenue 7,500