Question 25:

A company receives $20,000 in advance from a customer for services to be provided in the future.

Requirements:

1. Record the journal entry to recognize the receipt of advance payment.

2. Post the journal entry to the Unearned Revenue account in the ledger.

3. Calculate the total amount of advance payment received.

4. Analyze how this transaction affects the company's liability.

5. Discuss the implications of unearned revenue on financial statements.