Splish Magazine sold 11,520 annual subscriptions on August 1, 2020, for $17 each. Prepare Splish August 1, 2020, journal entry and the December 31, 2020, annual adjusting entry, assuming the magazines are published and delivered monthly. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Question

Rhett Jarvis

Business

14 February, 05:59

Splish Magazine sold 11,520 annual subscriptions on August 1, 2020, for $17 each. Prepare Splish August 1, 2020, journal entry and the December 31, 2020, annual adjusting entry, assuming the magazines are published and delivered monthly. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

+3

Answers (1)

Know the Answer?

Isabel Saunders · Answer 1

Date August 1st

cash 195,840 debit

unearned revenue 195,840 credit

--to record the subcription sale on August 1st--

Date December 31th

unearned revenue 81,600 debit

subscription revenue 81,600 credit

--to record accrued revenue at Dec 31th--

Explanation:

11,520 magazine subscriptions x $ 17 = $ 195,840

The subcription wil lbe unearned revenue at sale and reveneu will be recognize overtime as the earnings are accrued.

accrued from August 1 to Dec 20: 5 months

$ 195,840 x 5 months / 12 months = $ 81,600