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Moorehead Communications publishes a monthly sports magazine, Walkabout Preview. Subscriptions to the magazine cost 20 per year.

Question:

Moorehead Communications publishes a monthly sports magazine, Walkabout Preview. Subscriptions to the magazine cost €20 per year. During November 2020, Moorehead sells 15,000 subscriptions beginning with the December issue. Moorehead 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.


Instructions
a. Prepare the entry in November for the receipt of the subscriptions.
b. Prepare the adjusting entry at December 31, 2020, to record sales revenue recognized in December 2020.
c. Prepare the adjusting entry at March 31, 2021, to record sales revenue recognized in the first quarter of 2021.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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a Nov 30 Cash 300000 Unearned Subscription Revenue 15000 X20 300000 b Dec 31 U...View the full answer


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Related Video

Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. It can be thought of as a \"prepayment\" for goods or services that a person or company is expected to supply to the purchaser at a later date. As a result of this prepayment, the seller has a liability equal to the revenue earned until the good or service is delivered. This liability is noted under current liabilities, as it is expected to be settled within a year.

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