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I Have An Accounting Question…please Help..?

I am logging transactions in a general journal. I need to know what account to debit and credit the following transaction.
Entered into a contract with Southside Food Vendors to place vending machines in the waiting room. Fred is to receive 10% of all sales, with a minimum of $200 monthly. Received $200 as an advance payment.
I’m thinking that Vending Machine Revenue would be debit and Cash Credit, but am really uncertain. He is receiving an advance on a business that has yet to make a profit so his Revenue has to be debit somewhere. Right
Thanks for your help.

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This entry was posted on Wednesday, December 2nd, 2009 at 12:50 pm and is filed under Buying Vending Machines. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “I Have An Accounting Question…please Help..?”

  1. capwest5 Says:
    December 2nd, 2009 at 5:18 pm

    The entry is:
    Debit ‘Cash’ $200
    Credit ‘Unearned Revenue’ $200 {liability account}
    After a month, he will have earned that $200 advance payment, and the entry then would be:
    Debit ‘Unearned Revenue’ $200
    Credit ‘Vending Machine Revenue’ $200

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