S3-7 (similar to) Question Help * Wild Life, Inc., an outdoor magazine, collecte

Question

S3-7 (similar to) Question Help * Wild Life, Inc., an outdoor magazine, collected $4,200 on October 1 for one-year subscriptions from subscribers in advance. Jounalize and post the adjusting entry on December 31 to record the revenue that Wild Life, Inc. has earned, assuming no other adjusting entries have been made for the year. Compute the balances of the two accounts involved Journalize the adjusting entry. (Record debits first, then credits. Exclude explanations from any journal entries. Journal Entry Date Accounts Debit Credit Dec 31 Cash 350 Subscription revenue 350

Explanation / Answer

31-Dec Subscription Revenue advance 3150           Subscription Revenue 3150 Oct 01 Cash 4200        Subscription Revenue advance 4200 For one month 4200/12 For Oct to Dec(3 Month 350*3) 1050 Balance on December 31 (4200-1050)

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