Question

On October 1, 20X1, Paige Turner Publishing received $55,200 in cash for monthly subscriptions covering one year, recording the entry as a debit to Cash and a credit to Unearned Subscriptions. The correct adjusting entry at December 31, 20X1, is: ____________
a. Debit Subscriptions Income $13,800; credit Unearned Subscriptions $13,800.
b. Debit Unearned Subscriptions $55,200; credit Subscriptions Income $55,200.
c. Debit Unearned Subscriptions $13,800; credit Subscriptions Income $13,800.

Answer 1

Answer:

c. Debit Unearned Subscriptions $13,800; credit Subscriptions Income $13,800

Explanation:

Based on the information given the correct appropiate adjusting entry at December 31, 20X1, is to Debit Unearned Subscriptions $13,800 and Credit Subscriptions Income $13,800

December 31, 20X1

Debit Unearned Subscriptions $13,800

Credit Subscriptions Income $13,800

(3/12*$55,200=$13,800)

(October 1 to December 31 will gives us 3month)