What is the adjusting entry to this problem on Dec 31st?
On October 15, the school agreed to teach a four-month class (beginning immediately) for an individual for $3,100 tuition per month payable at the end of the class. The services are being provided as agreed, and no payment has yet been received.
i know accounts receivable is debited and tuition fees earned is credited but i can't get the amount right!
To determine the correct amount for the adjusting entry on December 31st, we need to consider the time frame and the terms of the agreement.
The terms of the agreement state that the school will teach a four-month class, beginning immediately, for $3,100 tuition per month. As of December 31st, three months would have passed since the start of the class.
To calculate the amount, we will multiply the monthly tuition fee ($3,100) by the number of months that have passed (3 months). This will give us the total amount earned by the school.
Adjusting Entry on December 31st:
- Debit: Accounts Receivable
- Credit: Tuition Fees Earned
The credit amount should be the total amount earned by the school for the three months of teaching. Therefore, the credit amount in the adjusting entry will be $9,300 ($3,100 per month x 3 months).
To summarize:
Debit: Accounts Receivable
Credit: Tuition Fees Earned ($9,300)