On October 1, the company recorded the transaction with a credit to Unearned Subscription Revenue.

Waldie Corporation publishes a monthly magazine for subscribers. The publication is delivered on the 10^th day of each month. They received cash of $96,000 on October 1, 2018 for one year's subscription in advance. On October 1, the company recorded the transaction with a credit to Unearned Subscription Revenue. The December 31, 2018 adjusting entry is

Expert Solution

--Advance received on Oct 1

--Period expired since then till 31 Dec = 3 months [Oct, Nov and Dec]
--Subscription Revenue earned = $ 96,000 x 3 months / 12 months = $ 24,000

--Adjusting entry on 31 Dec:

Date	General Journal	Debit	Credit
31-Dec-18	Unearned Subscription Revenue [because it was earlier credited]	$24,000
	Subscription Revenue		$24,000
	(Unearned revenue, now EARNED)

ekkarill92 answered 2 years ago

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