Question
Asked Nov 22, 2019
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I need to know how to record this transaction in a general journal.

1/18 Received $8,000 the January telephone bill from At&t for $375, due Feb.15.

1/20 Received utility bills for January due Feb 16, from Swepco for $360 and Tx Water Utilities for $280.

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Expert Answer

Step 1

The cash is received but the service for the same are not performed till date and this will result in the increase in the unearned revenue liability. In case of increase in liability, the related liability account should be credited. Hence, the unearned revenue is credited. 

The receipt of cash will also result in the increase in the cash balance of the company. In case of increase in the assets, the related asset account of the company should be debited. Hence, the cash account is debited.

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Dates Accounts, Title & Explanation Post ref. Debit(S) Credit(S) Cash Unearned revenue (To record the unearned |revemie) S 8,000 $ 8,000

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Step 2

All the expenses is of debit nature when such expenses is incurred by the company. The telephone bill expenses is incurred during the period and thus it is debited.

The payment of telephone bill will r...

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Dates Accounts, Title & Explanation Post ref. Debit(S) Credit(S) Telephone expenses $375 $ 375 Cash (To record the payment of telephone expenses)

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