Received Commission Of $20,000 By Cheque Half Of Which Is In Advance

Journal Entry For Commission Received Partially By Check And Partially Received In Advance

We can either record two entries or a single combine entry. In both cases, the result is the same.

Method 1

Firstly, we record the entry at the time when the Commission Received in full amount:

                                          Bank a/c  $20,000

 

                                                            Commission Revenue a/c  $20,000

 

                                                       (Commission Received By Cheque)

The portion of Commission revenue account of $10,000, which is not earned, is debited by transferring it to Unearned Commission Revenue Or Commission Received In Advance Account as shown below:

                      Commission Revenue a/c  $10,000

 

                                                                 Unearned Commission Revenue a/c  $10,000

 

                                               (Unearned Commission Revenue Is Recorded)

Unearned Commission Revenue is a liability for the company to render the services against the advance payment received by cheque.

Method 2

If we combine above two entries, then we have:

                                                  Bank a/c  $20,000

 

                                                                  Commission Revenue a/c  $10,000

 

                                                                  Commission Received In Advance a/c $10,000

 

                      (Commission Of $20,000 Partially Received And Partially Received In Advance)

So, the result is equal of two entries and a single combine entry.