Question

Saas Star is a company that provides TV Streaming services to it's customers. SaaS Star is on the accrual basis, and charges $1,200 for a year long subscription to its's platform. Customers who subscribe to Saas Star's services must pay the full $1,200 amount upfront in order to unlock their service.

On January 1st, SaaS Star sold a $1,200 annual license to a customer. The customer paid up front on this date. What is the journal entry for this transaction to record on January 1st?

Answer 1