Question

In December 2017, Quebecor Printing received magazine subscriptions for 2018 from a customer, who paid $220 in cash. What would be the appropriate journal entry for this event?

Answer 1

Answer:

Cash                                                   Debit       $ 220

Subscriptions received in advance  Credit                     $ 220

Explanation:

The most appropriate journal entry would be by debiting cash with $ 220 since cash has been received.

The credit account would be Subscriptions received in advance since the magazines have to be delivered in 2018 and the revenue has not been earned at the time of collections. This would be classified  in the balance sheet under current liabilities.