 happens is the accounts receivable goes up. But this is kind of the weird one right here because because now you would think it's not because now we have it in a liability account. So you would think that the under revenue here could be going down by that amount right. So that's where but but we're still going to say accounts receivable is going to go up because it's we're going to do another journal entry to kind of compensate for it. So this is what's actually happened. So we're going to say the accounts receivable is going to go up and then we're going to have the sales is going to go up. The sales is going to go up because we said it was I think equals 175 divided by five months and I'll make that negative. So for that amount and then we have the sales tax payable which we're going to imagine we have to deal with just to make things more complicated which was at point 0 775. So this equals this times point 0 775. And then the receivable would be this let's say negative sum of that right. So 71 71. So if I record that now the accounts receivable is going to go up by that 37 71 income is going to go up by the 35 and that liability of sales tax is going up. Now but but note that what this shouldn't really be going up to accounts receivable what should be happening instead is it should be going to under revenue bringing under revenue down. But the invoice form usually goes to accounts receivable right. So what's going to happen is we're going to end up with another journal entry to do that instead of just fixing it right here. We're going to do another journal entry that's going to be saying OK. Let's take the under revenue down and then accounts receivable is going to go back down so that we can and then we'll be able to see it in the sub ledger as well for the accounts receivable. So now we're going to say OK accounts receivable is going up by that. I'm sorry accounts receivable under revenue and then accounts receivable. So if I record this now accounts receivable is going to go back down. That's the wrong one. Sorry. And it's going to go back down and then under revenue is going to go down on the credit side leaving us with the five months that are still needed. So if I so then so note even looking at that I've kind of added another journal entry so that I can get my sub ledgers to work and then a quick books actually adds another another basically clearing account and doing this journal entry. So that's where you get a little bit more messiness happening over here. So let's record it and see what happens. So I'm going to say save it and close it. Is that right. Do I have everything right. Yeah. Let's do it. This customer has available credits. Now I should have applied this out already but I'm going to say OK. Yes. Apply out the credit. So here's the credit credits available prepayments. So it's a similar process as if I had a negative receivable. But now I've got these three boxes. So I'm going to apply out the prepayments 73 71 of the total one eighty eight because that's the amount of the invoice. Let's say done and then OK. I think that's good. Hopefully that's good. And if I go back into the invoice we can see now that the payment has been applied out. That payment isn't changing the journal entry. It's just an information information so that I can give this to the client if we needed to the journal entry would still be affected by that 37 on the accounts receivable or decreasing earned revenue. There's going to be a journal entry increase to sales 35 and this to 71. Now if you wanted to apply that out before you've recorded I think you could still have gone to apply credits up top. We'll test that out again next time for the next month. Let's go ahead and close it and check it out. If I go to the balance sheet and let's see what's what's happening what's happening over in balance area. We're going to say then there's the invoice for the 37 71. See even though it's down to zero here it's still up going for the 37 71 the invoice increase in the accounts receivable even though it's not like decreasing the liability of earned revenue. It's going to happen basically with the journal entry over there. So then the other side is going to go to the profit and loss the P in the L so profit and loss in August. There's the 35 just for the revenue side and then back to the balance sheet. We also have then the the liability of the sales tax. So let's do the sales tax to do where there it is. I see it. I see it. You don't have to point it out to me. I can find it myself. So there it is. And then if we go into the unearned revenue here's the unearned revenue what happened there because it went down if I go into it. And then I'm going to say OK. So I adjusted the date up top to bring it back. And so there's the journal entry. Now notice what it did here. It put the journal entry in as of the day that QuickBooks thinks it is right now because because we're working in the future. So that's why the date is messed up. But look let's look at it conceptually right now. We're going to say OK. What it did is it then took the amount out of the unearned revenue with a journal entry. And if I go into that journal entry I could change the date. Let's actually do that. I'm going to say let's change the date here to make it what was it 07 07. Let's just say 15 27. Let's say and then and then I'm going to say OK. Record it. You can't edit the journal entry as it's linked to a prepayment. OK. Whatever. I'm going to close this. OK. I don't want to do it restore it then if you're going to be like that. OK. So then in any case the other side we went to was this this account for prepayment transfer which is a clearing account. So now you've got kind of another clearing account that's in the middle here. So I'm going to close that out and then and then if I go back on up to the accounts receivable up top accounts receivable we're going to say then let's bring this back to twenty six to sort of make sure I see the whole thing here. And while there's a lot going on in twenty six let's try filtering it I'm going to customize the report filters and I'm going to filter by type transaction type. So we'll go down here and say we want to filter by there it is transaction type and then by journal I want to see the journal. OK. So there we have our journal and again it put it in there on twelve fifteen but there's the track transaction the thirty seven seventy one and it's trying to put that in the date that it thinks it is at this point in time. And so so there we have that and the other side once again if I go in there is going to it's going to be going to that clearing account I believe so if I go into the journal entry so accounts receivable account for prepay payment transfer so I'm going to close this back out close this back out close this back out so we see that there if I look at my customer balance detail. I can see now there's there's my customer so see I can see why they would want to do that to use the accounts receivable which would be this added step right here right which would be putting the invoice into accounts receivable instead of going to unearned revenue and then doing this transaction right here so that you can see it going in and out of accounts receivable so that you have the sub ledger record here. Notice what you don't see in here as you did with a negative receivable with a negative receivable it's actually easier to see.