Adjusting Entry for Unearned Revenue ???. Stardust publishes a monthly magazine

Question

Adjusting Entry for Unearned Revenue ???. Stardust publishes a monthly magazine featuring local restaurant reviews and upcoming social, cultural, and sporting events. Subscribers pay for subscriptions either one year or two years in advance. Cash received from subscribers is credited to an account called Magazine Subscriptions Received in Advance. On December 31, 2014, the end of the company's fiscal year, the balance of this account is $750,000. Expiration of subscriptions revenue is as follows. LO3 During 2014 During 2015 During 2016 150,000 375,000 225,000 Prepare the adjusting entry for December 31, 2014

Explanation / Answer

Accounts Title Dr Cr E3A Magazine Subscription Received In Advance $150,000 Subscription Revenue $150,000 (being adjusting entry made for revenue earned) E7A Royalty expenses Jan to June 2014 $20,000 July-Dec 2014 (300000*15%) $45,000 Royalty expense and income $65,000 Kozuch books Royalty Expenses $45,000 Royalty payable $45,000 Lacoma Books Royalty Receivable $45,000 Royalty Revenue $45,000 P1 Balance Sheet Account Amt of Adj Balanace After Income statement Account Amt of Adj Balance After calculation a Office supplies -770 133 Office supplies expenses 770 770 (903-133) b Prepaid Rent -600 200 Rent expenses 600 600 (800/4*3) c Accumulated Depreciation 208 208 Deprciation expenses 208 208 d Unearned Answering service revenue -148 740 Answering service revenue 148 148 888/12*2 e Wages payable 80 80 Wages expenses 80 80 If any doubt please comment. If satisfied you can rate

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