Jan
20
How do I reverse a prepaid advertising entry that was a barter against a merch sale but the add never ran?
Filed Under Arts & Entertainment
asked:
In this case, a company sold merchandise in exchange for advertising (a barter agreement). The merchandise was sold, and the A/R was reversed to prepaid advertising as the ad was to be run at a future date. The vendor has now defaulted, and I wish to write off the prepaid advertisement. To which account should I write it off against?
Model Train Supplies
In this case, a company sold merchandise in exchange for advertising (a barter agreement). The merchandise was sold, and the A/R was reversed to prepaid advertising as the ad was to be run at a future date. The vendor has now defaulted, and I wish to write off the prepaid advertisement. To which account should I write it off against?
Model Train Supplies
Comments
No Responses to “How do I reverse a prepaid advertising entry that was a barter against a merch sale but the add never ran?”
As the barter agreement was terminated due to non-compliance, the amount for the prepaid advertising would essentially become an accounts receivable. Therefore if the amount has been deemed uncollectable, then you would write it off to bad debt expense.