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yulyashka [42]
3 years ago
6

Better Publications sold annual subscriptions to their magazine for $42,000 in December, 2016. The magazine is published monthly

. The new subscribers received their first magazine in January, 2017. What adjustment should be made in January if the subscriptions were originally recorded as a liability?
Business
1 answer:
Amanda [17]3 years ago
7 0

Explanation:

The adjusting entry is as follows

On January 31

Unearned revenue A/c Dr $3,500

     To Magazine subscription  revenue A/c $3,500

(Being the unearned revenue is recorded)

The computation is shown below:

= Sale value of annual subscriptions ÷ total number of months in a year

= $42,000 ÷ 12 months

= $3,500

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