Answer:
Debit Cash account $1,160
Credit Unearned revenue $1,160
Being entries to recognize amount collected in advance for catering services.
Explanation:
When cash is received in advance for a service to be rendered later, the transaction creates both an asset and a liability in the books of the party that received the cash as the obligation to perform the service still exist.
The entries required are debit to cash and a credit to unearned or deferred revenue.
Hence for Ted Catering, the required entries are;
Debit Cash account $1,160
Credit Unearned revenue $1,160
