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 2 years ago
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