We have a bit of a quandry. We are billing our clients for services we haven't yet performed. Prepaid bulk hour services. To me this is
Example: 50 bulk hours - $5000 - Jan 1st, 2008
Work done - Jan 15th - 2 hrs
I imagine that the $5000 we collected, goes onto our liability sheet as a loan. Lets call it Client Loans. Do we enter this as an asset like a bank loan then? And counter the liability side with an entry called Prepaid Hrs? Like this -
Client Loans - $5000
Prepaid Services - $5000
How do we generate an invoice to show income? Do we debit the Client Loans and Prepaid Services at the same time?
We're a little bit over our heads here.
Thanks in advance...