Hi! I am trying to figure out the best way to record an entry for the following scenario. I have a 12 month subscription that started in January but I did not bill out the full 12 month bill until May. Not our usual process but it was missed. I am trying to find a way to book this as deferred revenue over the 12 month subscription period, without having to mess with my AR entries for May.
Deferred Revenue Entry
Answers
May entries:
Dr AR 1200
Cr Deferred Rev 1200
That is for the bill you raised in May.
Then recognize that 5 months have been earned
Dr Deferred Rev 500
Cr Revenue 500
Then chase your customer to bring their payments up to date:)
In June, July etc
Dr Deferred Rev 100
Cr Revenue 100
I assume the amounts are not material
Thank you! That totally makes sense. Not sure why i was making it more difficult than it needed to be.