QS 3-4 Adjusting for unearned revenues L.O. A1, P1 Eager Co. receives $20,000 ca

Question

QS 3-4 Adjusting for unearned revenues L.O. A1, P1

Eager Co. receives $20,000 cash in advance for 4 months of legal services on October 1, 2011, and records it by debiting Cash and crediting Unearned Revenue both for $20,000. It is now December 31, 2011, and Eager has provided legal services as planned. What adjusting entry should Eager make to account for the work performed from October 1 through December 31, 2011? (Omit the "$" sign in your response.)

Rutherford Co. started a new publication called Contest News. Its subscribers pay $48 to receive 12 issues. With every new subscriber, Rutherford debits Cash and credits Unearned Subscription Revenue for the amounts received. The company has 100 new subscribers as of July 1, 2011. It sends Contest News to each of these subscribers every month from July through December. Assuming no changes in subscribers, prepare the journal entry that Rutherford must make as of December 31, 2011, to adjust the Subscription Revenue account and the Unearned Subscription Revenue account.(Omit the "$" sign in your response.)

Eager Co. receives $20,000 cash in advance for 4 months of legal services on October 1, 2011, and records it by debiting Cash and crediting Unearned Revenue both for $20,000. It is now December 31, 2011, and Eager has provided legal services as planned. What adjusting entry should Eager make to account for the work performed from October 1 through December 31, 2011? (Omit the "$" sign in your response.)

Explanation / Answer

Well, they have provided three of the four months of prepaid services or $15,000 Debit 'Unearned Revenue' $15,000 Credit 'Service Revenue' $15,000

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