Question
In: Accounting
E11.4 (LO 1) Moreno Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine...
E11.4 (LO 1) Moreno Company publishes a monthly sports
magazine, Fishing Preview. Subscriptions to the magazine cost $20
per year. During November 2020, Moreno sells 15,000 subscriptions
beginning with the December issue. Moreno 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.
Instructions
a. Prepare the entry in November for the receipt of the
subscriptions.
b.
PreparetheadjustingentryatDecember31,2020,torecordsalesrevenuerecognizedinDecember2020.
c. Prepare the adjusting entry at March 31, 2021, to record
sales revenue recognized in the first quarter of 2021.
Solutions
Expert Solution
Journal entry
| Date | account and explanation | Debit | Credit |
| Nov | cash (15000*20) | 300000 | |
| Unearned subscription revenue | 300000 | ||
| Dec 31 | Unearned subscription revenue (300000/12) | 25000 | |
| Subscription revenue | 25000 | ||
| Mar 31 | Unearned subscription revenue (25000*3) | 75000 | |
| Subscription revenue | 75000 | ||
ekkarill92 answered 4 years agoRelated Solutions
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