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Prepare a correcting entry on december 29

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Question

Barnes Company has employed a bookkeeper who is inexperienced. On December 29, after reviewing the records for the year, you discover the following error.

On September 1, Barnes Company received $940 for services to be performed in the future. The bookkeeper recorded this by debiting Cash for $490 and crediting Service Revenue for $490.

Note: Assume that it is the company's policy to record the receipt of revenue in advance of earning it in the Deferred Revenue account.

Required:

Prepare a correcting entry on December 29. Make sure to enter the day for each separate transaction.

Reference no: EM132385740

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