Answer:
Debit Unearned/Deferred revenue $8,000
Credit Sales revenue (p/l) $8,000
Being entries to recognized earned revenue for the period
Explanation:
August of 2011, 1 year subscription of $24,000
Revenue earned per month = $24,000/12 = $2,000
Revenue earned (between September and December) = $2,000 × 4
= $8,000
To recognize this, adjusting entries required on Dec. 31, 2011
Debit Unearned/Deferred revenue $8,000
Credit Sales revenue (p/l) $8,000
Being entries to recognized earned revenue for the period
