Accounting for premium revenues

A hospital arranges with an HMO to provide hospital care to the HMOs members at a specific rate per member, per month. During June, the HMO paid the hospital $850,000, in accordance with the agreement. The hospitals cost accounting records showed that, if it had billed the HMO in accordance with its established billing rates, it would have billed the HMO $975,000. Prepare the appropriate journal entry (or entries) to record this transaction. If no adjustment is necessary, select 'No debit (or credit) entry needed' in the account fields and enter 0 in the amount fields.

Accounting for premium revenues A hospital arranges with an HMO to provide hospital care to the HMO's members at a specific rate per member, per month. During June, the HMO paid the hospital $850,000, in accordance with the agreement. The hospital's cost accounting records showed that, if it had billed the HMO in accordance with its established billing rates, it would have billed the HMO $975,000. Prepare the appropriate journal entry (or entries) to record this transaction. If no adjustment is necessary, select 'No debit (or credit) entry needed' in the account fields and enter 0 in the amount fields