Brooke Accounting Services Collected $15,000 from a Customer on June

question 189

Essay

Brooke Accounting Services collected $15,000 from a customer on June 1 and agreed to provide accounting services during the next six months. Brooke expects to provide an equal amount of services each month.

Required
1. Prepare the journal entry for the receipt of the customer deposit on June 1.
2. Prepare the adjusting entry on June 30.
3. What will be the effect on net income for June if the entry in (2) is not recorded?

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Definitions:

Private Placements

A means of raising capital through the sale of securities to a relatively small number of select investors rather than through a public offering.

Corporate Debt Issues

refer to the financial obligations or borrowings taken on by companies, typically through the issuance of bonds, loans, or commercial paper.

Corporate Equity Issues

The process by which companies issue shares of stock to raise equity capital.

Municipal Debt Issues

Bonds or other forms of debt issued by municipalities to finance public projects.