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11 July, 01:55

On April 1, Griffith Publishing Company received $33,480 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the first year?

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  1. 11 July, 03:09
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    The adjusting entry is as follows:

    On December 31

    Unearned revenue Dr $8,370

    To Fees earned $8,370

    (Being the unearned revenue is recorded)

    The computation is shown below:

    = Total 36 months subscription received amount : Given months

    = $33,480 : 36 months

    = $930

    So, for nine months, it is

    = $930 * 9 months

    = $8,370
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