Answer:
Journal to be posted on August 1, 2017
Debit Cash account $157,080
Credit Deferred revenue $157,080
Being entries to record cash received on August 1, 2017 for subscription to be sold.
Debit Deferred revenue $65,450
Credit Revenue (p/l) $65,450
Being entries to recognized revenue earned from subscription as at December 31, 2017
Explanation:
Number of subscription sold = 9240
Selling price of each = $17
Amount received = 17 × 9240
= $157,080
Journal to be posted on August 1, 2017
Debit Cash account $157,080
Credit Deferred revenue $157,080
Being entries to record cash received for subscription to be sold
On December 31 2017, the fee for 5 months would have been earned
= (5/12) × $157,080
= $65,450
Entries to be posted
Debit Deferred revenue $65,450
Credit Revenue (p/l) $65,450
Being entries to recognized revenue earned from subscription as at December 31, 2017.
