JournaldrillUnearned revenue earned
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
On November 1, Peak Fitness Studio collected $4,800 for six-month memberships starting that day and credited Unearned Revenue. Record the adjusting entry on December 31.
What this exercise teaches
The memberships earn $800 per month ($4,800 / 6), and two months (November and December) have passed, so $1,600 is now earned. Unearned Revenue is debited to reduce the liability and Service Revenue is credited. The remaining $3,200 stays a liability for the four months still owed.
A hint if you get stuck
Part of the obligation to members has been fulfilled, so shift that part from the liability to revenue.
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