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Chapter 3: Q 9SE-3 (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

T-accounts are as follows:

Unearned Subscription Revenue

8,000

180,000

172,000

Bal.

Subscription Revenue

8,000

8,000

Bal.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition on T-account

T-account refers to the representation of account in T format, which is used to post the journal entries.

02

Explanation on T-account

The balance of subscription revenue account equals $8,000 and unearned subscription revenue account equals $172,000.

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Most popular questions from this chapter

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