Question

Item1 Time Remaining 2 hours 44 minutes 44 seconds02:44:44 Item 1Item 1 Time Remaining 2 hours 44 minutes 44 seconds02:44:44 On April 1, Garcia Publishing Company received $19,080 from Otisco, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year

Answer 1

Answer and Explanation:

The journal entry is shown below:

Unearned revenue $4,770

      To fees earned $4,770

(Being the adjusting entry is passed)

The calculation is shown below:

= Received amount ÷ total months × calculated months

= $19,080 ÷ 36 months × 9 months

= $4,770

Hence, the above entry should be recorded and the same is to be considered