Ask Question
BusinessBusiness
3 August, 06:07

On April 1, Garcia Publishing Company received $24,480 from Otisco, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year?

+5
Answers (1)
  1. 3 August, 06:34
    0
    Answer: Debit Unearned fees $6,120, Credit Fees income $6,120.

    Explanation: Garcia Publishing received $24,480 from Otisco on April 1 and this was recorded as unearned fees. This means Garcia would have debited cash with $24,480 and credited unearned fees $24,480. Remember the fees was paid at the beginning of April and is for 36-month subscriptions. So, the amount in unearned fees would be unwound to income (fees) over the tenor of the subscription (36 months). Therefore, monthly amortization would be $24,480 divided by 36 months = $680. April 1 to December 31 is 9 months, $680 multiplied by 9 months is $6,120.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On April 1, Garcia Publishing Company received $24,480 from Otisco, Inc. for 36-month subscriptions to several different magazines. The ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
A calendar-year corporation has positive current E&P of $1,500 and a deficit in accumulated E&P of ($2,000). The corporation makes a $500 distribution to its sole shareholder on July 1.
Answers (1)
Select the answer that best describes opportunity cost: A. The amount of money you put into savings every year. B. The amount of money a business makes every year from sales. C.
Answers (1)
You made an investment of $16,500 into an account that paid you an annual interest rate of 2.8 percent for the first 7 years and 7.2 percent for the next 14 years. What was your annual rate of return over the entire 21 years
Answers (1)
During the recent economic crisis, many financial managers and corporate officers have been criticized for (a) poor decisions, (b) lack of ethical behavior, (c) large salaries, (d) lucrative severance packages worth millions of dollars, and (e)
Answers (1)
Which part of a database is organized most like a spreadsheet, with rows and columns?
Answers (1)
New Questions in Business
What is the best definition for profit?
Answers (2)
Suppose your New Year resolution is to get back in shape. You are considering various ways of doing this: you can sign up for a gym membership, walk to work, take the stairs instead of the elevator, or watch your diet.
Answers (1)
Comparable worth refers to a. the value of a job to society. b. equal pay for different types of work that are equally demanding. c. the minimum wage. d. the relative worth of men and women in the workplace.
Answers (1)
The gross earnings of the factory workers for Larkin Company during the month of January are $73,000. The employer's payroll taxes for the factory payroll are $9,200. The fringe benefits to be paid by the employer on this payroll are $6,200.
Answers (1)
Which piece of educational information is normally not asked about on a job application?
Answers (1)
Home » Business » On April 1, Garcia Publishing Company received $24,480 from Otisco, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately.
Sign Up Forgot Password?