Exercise 10-4 Moreno Company publishes a monthly sports magazine, Fishing Previe

Question

Exercise 10-4 Moreno Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $31 per year. During November 2017, Moreno sells 18,756 subscriptions beginning with the December issue. Moreno 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 Prepare the entry in November 30 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 Debit Credit Nov. 30 Prepare the adjusting entry at December 31, 2017, to record sales revenue recognized 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

Explanation / Answer

Journal entry :

Date accounts titles and explanation debit Credit Nov 30 Cash 581436 Unearned subscription revenue (18756*31) 581436 (To record unearned revenue) Dec 31 Unearned subscription revenue 48453 Subscription revenue (581436/12) 48453 (To record adjusting entry) Mar 31 Unearned subscription revenue 145359 Subscription revenue (581436/12)*3 145359 (To record adjusting entry)

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