I have to journalize these transactions and post entries to t-account and I am u
ID: 2489810 • Letter: I
Question
I have to journalize these transactions and post entries to t-account and I am unsure of how to enter a retainer amount for the following... Also am unsure of how to get remaining balance of zero for retainer amount?
Mar 2 MM did staging and photo work for Show Me The Money; services are valued at $1,500. The invoice for the services was provided to the sports agency at the end of the shoot. Mr. Quan is so impressed with Nick’s attention to detail, he pays a $1,200 retainer for his to stage and film his upcoming engagement and subsequent wedding to Patty Professional.
Mar 22 MM paid $125 for non-warranty auto repairs that occurred on the way to filming the Quan-Professional engagement. MM provided staging and social media materials for the Quan-Professional engagement announcement. The value of the filming work performed is $800 of the retainer amount.
Mar 25 Mr. Quan & Ms. Professional have a huge disagreement while on vacation in Las Vegas. Mr. Quan’s image is damaged in the media. He requests additional photos and web content be created showing his softer side: images with puppies and kittens. Nick pays to rent the animals at a cost of $290. The value of his services is $4500 due to the extent of the work that needs to be done, emergency timing, and additional costs associated with the job (working with animals- he’s allergic!). Show Me The Money paid the necessary cash due at the time the services were performed. The balance of the retainer should be zero after recording these entries.
Explanation / Answer
Answer
Mar 2
1. Show Me The Money (Sports agency A/c) Dr. $1,500
To Services revenues A/c Cr. $ 1500
2. Cash A/c Dr. $1,200
To Retainer received in advance A/c Cr. $1,200
Mar 22
1. Non-warranty auto repairs A/c Dr. $125
To cash A/c Cr. $ 125
2. Retainer Received in advance A/c Dr. $800
To service Revenue A/c Cr. $800
Mar 25
1. Animal Rent Cost A/c Dr. $290
To Cash A/c Cr. $290
2. Retainer received in advance A/c Dr. $ 400 ($ 1200 - $ 800)
Cash A/c Dr. $ 5600 ($ 4500 - $ 400 + 1500)
To Service Revenue A/c Cr. $ 4500
To Show Me The Money (Sports agency A/c) Cr. $ 1500