Question

selenna, inc., collects cash from customers in advance and from other customers after the sale.
read the requirement.
next, record the entry to show selenna collecting $15,000 cash for a portion of the revenue previously earned on account.

b. journalize selenna receiving $6,000 in advance and then earning $4,500 as service revenue.
start by recording selennas cash collections in advance of services being performed.

Explanation:

Step1: Record cash collection in advance

When cash is received in advance, Cash (an asset) increases (debit) and Unearned Revenue (a liability) increases (credit).

$$\begin{array}{|l|r|r|} \hline \text{Date} & \text{Accounts} & \text{Debit} & \text{Credit}\\ \hline 2024 & \text{Cash} & 6,000 & \\ & \text{Unearned Revenue} & & 6,000\\ \hline \end{array}$$

Step2: Record revenue earned

When revenue is earned, Unearned Revenue (a liability) decreases (debit) and Service Revenue (a revenue account) increases (credit).

$$\begin{array}{|l|r|r|} \hline \text{Date} & \text{Accounts} & \text{Debit} & \text{Credit}\\ \hline 2024 & \text{Unearned Revenue} & 4,500 & \\ & \text{Service Revenue} & & 4,500\\ \hline \end{array}$$

Answer:

For cash collection in advance:

$$\begin{array}{|l|r|r|} \hline \text{Date} & \text{Accounts} & \text{Debit} & \text{Credit}\\ \hline 2024 & \text{Cash} & 6,000 & \\ & \text{Unearned Revenue} & & 6,000\\ \hline \end{array}$$

For revenue earned:

$$\begin{array}{|l|r|r|} \hline \text{Date} & \text{Accounts} & \text{Debit} & \text{Credit}\\ \hline 2024 & \text{Unearned Revenue} & 4,500 & \\ & \text{Service Revenue} & & 4,500\\ \hline \end{array}$$