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16 April, 16:29

Metlock Magazine sold 11,280 annual subscriptions on August 1, 2017, for $20 each. Prepare Metlock's August 1, 2017, journal entry and the December 31, 2017, annual adjusting entry, assuming the magazines are published and delivered monthly.

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  1. 16 April, 17:34
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    cash 225,600

    unearned subscriptions revenue 225,600

    to record sales of magazines subscriptions

    unearned subscriptions revenue 225,600

    subscription revenue 225,600

    to record accrued earnings from magainzes subcription

    Explanation:

    We will enter the subscriptions as unearned because, the company has the obligation to deliver 12 magazines to each customer. The revenue will be accrued over time along with the magazines delivered.

    August 1st:

    11,280 magazines subscriptions x $20 = $225,600

    August 1st to December 31th: 5 months

    earned portion: 225,600 x 5/12 = 94,000
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Home » Business » Metlock Magazine sold 11,280 annual subscriptions on August 1, 2017, for $20 each. Prepare Metlock's August 1, 2017, journal entry and the December 31, 2017, annual adjusting entry, assuming the magazines are published and delivered monthly.
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