Prepaid Invoice Question


V

vibrase

I'm probably not in the proper section but...

Using Quickbooks 2003 Pro

Its been a while since I touched anything accounting wise or software wise
so please bear with me. I'm looking to do the following:

Company A has a year long contract at 15000 per anum.

They paid the total invoice.

I want to divide up the payments to show income in each month (accrual?)
with 1250 posted for each month starting this past January and stretching
throughout the entire year. I do not want to show the 15000 for income in
january but only the 1250.

Please, no flames ;]
 
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S

Stephanie Serba

Post the entire amount to "Unearned Revenue" or "Deferred Revenue". At the
end of every month, post an adjustment for the 1250 per month. Transfer the
amount from "Deferred Revenue" to "Revenue".

Accounts Receivable 15,000.00
Deferred Revenue 15,000.00


Jan 31

Deferred Revenue 1,250.00
Revenue 1,250.00

Feb 28

Deferred Revenue 1,250.00
Revenue 1,250.00

You get the idea... :)


--
Stephanie Serba, AICIA
Partner, Durham Business Outsource
Accounting & Technology
www.dbo.ca
(e-mail address removed)
REMOVE NOSPAM TO REPLY
 
P

Paul A. Thomas

Stephanie Serba said:
Post the entire amount to "Unearned Revenue" or "Deferred Revenue". At the
end of every month, post an adjustment for the 1250 per month. Transfer the
amount from "Deferred Revenue" to "Revenue".

Accounts Receivable 15,000.00
Deferred Revenue 15,000.00

Not exactly correct. You didn't create an AR since you are receiving the
cash. Probably debit the bank for the $15,000 is the correct entry. If the
"sale" was already booked and an associated AR created then everything is
off.
 
D

DGG

So what Paul is saying is this:

Original entry:

(if invoice was paid in first month services were performed)
Cash 15,000
Unearned Revenue 13,750
Revenue 1,250

(if invoice was paid in a month PRIOR to first month in which services
were performed)
Cash 15,000
Unearned Revenue 15,000

Each month afterward
Unearned Revenue 1,250
Revenue 1,250
 
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V

vibrase

Sorry

I invoiced for one month but they decided to pay the entire year.

Thanks for your replies.
 

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