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11 June, 00:45

On april 1, griffith publishing company received $1,548 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. 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 June, 04:12
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    Given:

    April 1 - Griffith publishing company received $1,548 from Santa Fe, inc. for 36-month subscriptions.

    1,548 / 36 months = 43 per month.

    Assuming that the amount is paid in cash.

    Debit Credit

    April 1:

    Cash 1,548

    Unearned Revenue 1,548

    April 30:

    Unearned Revenue 43

    Revenue Fees 43

    May 31:

    Unearned Revenue 43

    Revenue Fees 43

    June 30:

    Unearned Revenue 43

    Revenue Fees 43

    July 31

    Unearned Revenue 43

    Revenue Fees 43

    August 31:

    Unearned Revenue 43

    Revenue Fees 43

    September 30:

    Unearned Revenue 43

    Revenue Fees 4 3

    October 31:

    Unearned Revenue 43

    Revenue Fees 43

    November 30:

    Unearned Revenue 43

    Revenue Fees 43

    December 31:

    Unearned Revenue 43

    Revenue Fees 4 3

    Book Value of Unearned Revenue is: 1,548 - (43*9) = 1,548 - 387 = 1,161

    Since it is a monthly subscription, the unearned revenue must always have an adjusting entry at the end of the month because Griffith company has already earned some of the prepaid fees.
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