WTI received $12,000 in advance for a six-month training course starting in November. At year-end, they had provided five months of training and earned $4,800 in fees. An adjusting entry is needed to recognize the $4,800 in training fees earned as revenue by debiting Unearned Training Fees and crediting Training Fees Earned. The remaining $7,200 will be recognized as revenue in the following year when the final month of training is provided.

1. Prepare the necessary adjusting journal entries for items a through h . Assume that adjusting
entries are made only at year-end.
On November 1, WTI agreed to do a special six-month course (starting immediately) for a client.
The contract calls for a monthly fee of $2,400, and the client paid the first five months' fees in
advance. When the cash was received, the Unearned Training Fees account was credited. The fee
for the sixth month will be recorded when it is collected in 2014.
Prepare the necessary adjusting journal entries for items a through h . Assume that adjusting
entries are made only at year-end.
Solution
Dec. 31 Unearned Training Fees A/c Dr $ 4,800 To Training Fees Earned A/c
$ 4,800