A fortune co receives 30000 cash in advance for four
a. Fortune Co. receives $30,000 cash in advance for four months of legal services on October 1, 2011, and records it by debiting Cash and crediting Unearned Revenue, both for $30,000. It is now December 31, 2011, and Fortune has provided legal services as planned. What adjusting entry should Fortune make to account for the work performed from October 1 through December 31, 2011?
b. Warner Co. started a new publication called Contest News. Its subscribers pay $24 to receive 12 issues. With every new subscriber, Warner debits Cash and credits Unearned Subscription Revenue for the amounts received. Warner has 100 new subscribers as of June 1, 2011. It sends Contest News to each of these subscribers every month from June through December. Assuming no changes in subscribers, prepare the journal entry that Warner must make as of December 31, 2011, to adjust the Subscription Revenue account and the Unearned Subscription Revenue account.
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help