Prepare the adjusting entry in journal form: Attached
E3: Green Mountain Company of Montpelier, Vermont, publishes a monthly magazine featuring local restaurant reviews and upcoming social, cultural, and sporting events. Subscribers pay for subscriptions either one year or two years in advance. Cash received from subscribers is credited to an account called Magazine Subscriptions Received in Advance. On December 31, 2003, the end of the company's fiscal year, the balance of this account was $1, 000,000. Expiration of subscriptions revenue is as follows:
During 2003: $200,000
During 2003: $500,000
During 2003: $300,000
Prepare the adjusting entry in journal form for December 31, 2003
When the subscription is received, it is credited to Magazine Subscriptions Received in Advance. This is a liability account since the magazines have not yet been despatched and the money is received in advance.
Once the magazines have been ...
The solution explains the adjusting entry for unearned revenue.