The following information relates to the next two questions. On 1^st December the Divine Hotel received a down payment of $30,000 for a 3 day conference that it will host 31^st December - 2^nd January.
-The Divine Hotel should make the following 31^st December year end adjusting entry:

Question

Quizplus · Accepted Answer

The hotel received a down payment of $30,000 for a 3-day conference, which means that $10,000 per day will be earned. As of December 31st, only one day of the conference will have been completed, so the hotel has earned $10,000 in revenue and still has $20,000 of unearned revenue. Therefore, the adjusting entry should be to debit Unearned Revenue $10,000 and credit Revenue $10,000.

The Following Information Relates to the Next Two Questions