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Contemporary Designs, Inc. is an interior-decorating firm. Customers must pay 50 percent of their estimated bill before any work is performed. On November 20 of the current year, Contemporary Designs received and recorded a $5,000 advance payment from a customer on a new job that was scheduled to begin on December 1. As of Decemeber 31, the job has been completed. No further payments have been received by December 31 from the customer, nor have additional entries relating to this job been recorded in the accounting records of Contemporary Designs.
a.)Prepare the entry to record the November 20 advance payment.
b.)Prepare any necessary adjusting journal entries in Contemporary Designs’ accounting records as of December 31.
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