Crane Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2022, Crane sells 12,300 subscriptions for cash, beginning with the December issue. Crane prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. The company has a December 31 year-end. Prepare the entry in November for the receipt of the subscriptions.

Question

Joe Gross

Business

9 January, 02:26

Crane Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2022, Crane sells 12,300 subscriptions for cash, beginning with the December issue. Crane prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. The company has a December 31 year-end. Prepare the entry in November for the receipt of the subscriptions.

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Terrence Wiggins · Answer 1

The journal entry is shown below:

Cash A/c Dr $344,400

To Unearned subscription A/c $344,400

(Being the advance subscription is recorded)

The computation is shown below:

= Number of subscriptions * magazine cost per year

= 12,300 subscriptions * $28

= $344,400

For the receipt of the subscriptions, we debited the cash account and credited the unearned subscription account