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18 October, 19:59

During August of 2011 Nickle Publishing received $24,000 for 1-year subscriptions to a new magazine. Magazines are mailed to subscribers each month, starting in September of 2011. What adjusting entry should Nickle make on Dec. 31, 2011?

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  1. 18 October, 20:00
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    Debit Unearned/Deferred revenue $8,000

    Credit Sales revenue (p/l) $8,000

    Being entries to recognized earned revenue for the period

    Explanation:

    August of 2011, 1 year subscription of $24,000

    Revenue earned per month = $24,000/12 = $2,000

    Revenue earned (between September and December) = $2,000 * 4

    = $8,000

    To recognize this, adjusting entries required on Dec. 31, 2011

    Debit Unearned/Deferred revenue $8,000

    Credit Sales revenue (p/l) $8,000

    Being entries to recognized earned revenue for the period
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Home » Business » During August of 2011 Nickle Publishing received $24,000 for 1-year subscriptions to a new magazine. Magazines are mailed to subscribers each month, starting in September of 2011. What adjusting entry should Nickle make on Dec. 31, 2011?
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