Question & Answer: Adjusting entries for unearned and accrued fees The balance in the unearned fees account, before adjustment at…..

EX 3-11 Adjusting entries for unearned and accrued fees The balance in the unearned fees account, before adjustment at the end of the year, is $97,770. Of these fees, $82,220 have been earned. In addition, $34,250 of fees have been earned but have not been billed. Journalize the adjusting entries (a) to adjust the unearned fees account and (b) to record the accrued fees. OBJ. 2

Adjusting entries for unearned and accrued fees The balance in the unearned fees account, before adjustment at the end of the year, is $97,770. Of these fees, $82,220 have been earned. In addition, $34,250 of fees have been earned but have not been billed. Journalize the adjusting entries (a) to adjust the unearned fees account and (b) to record the accrued fees.

Expert Answer

To transfer the unearned fee to earned revenue

	Unearned Revenue a/c Dr	82,220
	To Revenue a/c		82,220
	(Being Unearned revenue recognised)

To recognize the Earned but not billed fee
	Earned Fee receivable a/c Dr	34,250
	To Revenue a/c		34,250
	(Being Fee earned is recognized)

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