Exercise 10-7 Wildhorse Co. Ltd. publishes a monthly sports magazine, Fishing Pr

Question

Exercise 10-7 Wildhorse Co. Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $20 per year. During November 2017, Wildhorse sells 7,380 subscriptions for cash, beginning with the December issue. Wildhorse 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. The company has a December 31 year-end. Prepare the entry in November for the receipt of the subscriptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Date Account Titles and Explanation Nov Debit Credit SHOW LIST OF ACCOUNTS Prepare the adjusting entry at December 31, 2017, to record subscription revenue in December 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually Date Account Titles and Explanation Debit Credit Dec. 31 SHOW LIST OF ACCOUNTS

Explanation / Answer

Nov Cash 147600 =7380*20      Unearned Subscription Revenue 147600 31-Dec Unearned Subscription Revenue 12300 =147600/12*1       Subscription Revenue 12300 31-Mar Unearned Subscription Revenue 36900 =147600/12*3       Subscription Revenue 36900

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