How to Book Allowance for Doubtful Accounts Journal Entry
Allowance for Doubtful Accounts (AFDA) is an account used to record the estimated amount of customer accounts that may not be collected. It is a contra-asset account, meaning it is a negative asset account that offsets the Accounts Receivable balance. There are two steps to recording AFDA.
How to Book Capitalization and Amortization for Costs to Obtain a Contract Journal Entry
Revenue recognition under ASC 606 requires the capitalization of costs to complete a contract. This is most often but is not limited to sales commissions. The capitalized costs are amortized over the expected customer life (the contract length plus reasonably anticipated renewals).
How to Book Early Exercised Stock Options Journal Entry
The early exercise of stock options allows the option holder to purchase shares prior to the vesting period. Typically, stock that is purchased via early exercise is subject to repurchase if the holder does not meet the vesting criteria when an event like employee separation occurs.
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