-1

A student has total tuition fee of 8,000. The student paid 3,000 as a down payment and the journal entry is:

Cash 3,000
AR   5,000
     Tuition Fee  8,000

But what if the student will pay 3,500 for the next payment, what would be the journal entry? Is this correct?

Cash 3,500
AR   4,500
     Tuition Fee  8,000

closed as off-topic by Chris W. Rea, Rupert Morrish, mhoran_psprep, NL - Apologize to Monica, Dheer Oct 7 at 17:42

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "Questions about accounting are off-topic unless they relate directly to personal finance or investing from an individual's perspective." – Chris W. Rea, Rupert Morrish, mhoran_psprep, NL - Apologize to Monica, Dheer
If this question can be reworded to fit the rules in the help center, please edit the question.

  • Please edit your question to show it from the students point of view (albeit a student with an unusual level of precision in their budgeting). Otherwise it is off-topic in this stack. – Rupert Morrish Oct 7 at 4:51
  • @RupertMorrish Thank you for your response. Please check my updated question. – Jearson Oct 7 at 5:05
  • @RupertMorrish Can you please help me on this? Thank you. – Jearson Oct 7 at 10:05
  • If these are pre-payments/deposits prior to courses beginning, then a liability account for the school should be considered too. – Luck Oct 7 at 18:55
  • @Luck What do you mean? Can you give example. – Jearson Oct 8 at 6:40
1

Your second journal entry is totally incorrect. It's simply

Cash 3,500
    Accounts Receivable 3,500

from the tuition fee recipient's point of view. From the student's point of view, the first payment is:

Tuition Fee 8,000
    Cash 3,000
    Accounts Payable 5,000

and the second payment is:

Accounts Payable 3,500
    Cash 3,500

Note by paying the second payment, the student is essentially converting the tuition fee recipient's Accounts Receivable into Cash. From the student's point of view, the student is converting cash into reduced Accounts Payable.

Edit: oh, and if your accounting program supports it, you might want to add this line to the journal entries:

    Tuition Fee 0,00

The idea is that it helps you remember to which account the Accounts Payable / Accounts Receivable transaction is related to. The Tuition Fee account is not part of the transaction otherwise.

Or, you could have hierarchical accounts Accounts Receivable / Tuition Fee (for tuition fee recipient) and Accounts Payable / Tuition Fee (for student).

  • Thank you so much for giving two point of views. But I am concern for the recipient's point of view, since I am doing a enrollment system with accounting. – Jearson Oct 7 at 12:02
  • Oaky I got your point. Thank you. – Jearson Oct 7 at 12:52

Not the answer you're looking for? Browse other questions tagged or ask your own question.