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Chapter 3: Q 9SE-2 (page 159)

Eastside Magazine collects cash from subscribers in advance and then mails the magazines to subscribers over a one-year period. Requirements 1. Record the journal entry to record the original receipt of \(180,000 cash. 2. Record the adjusting entry that Eastside Magazine makes to record earning \)8,000 in subscription revenue that was collected in advance. 3. Using T-accounts, post the journal entry and adjusting entry to the accounts involved and show their balances after adjustments. (Ignore the Cash account.)

Short Answer

Expert verified

Journal entries are as follows:

Date

Accounts and Explanation

Debit

Credit

Unearned Subscription Revenue

$8,000

Subscription Revenue

$8,000

To record subscription revenue

Step by step solution

01

Step-by-Step SolutionStep 1: Explanation on  Revenue

Revenue refers to income received by the business for providing goods or services to the customers.

02

Explanation on Journal Entry

To record the revenue, unearned subscription revenue account is debited and subscription revenue account is credited by $8,000, respectively.

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