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Chapter 13: Question 4BE (page 692)

BE13-4 (L01) Sport Pro Magazine sold 12,000 annual subscriptions on August 1, 2017, for $18 each. Prepare Sport Pro’s August 1, 2017, journal entry and the December 31, 2017, annual adjusting entry, assuming the magazines are published and delivered monthly.

Short Answer

Expert verified

The amount of subscription revenue is $90,000.

Step by step solution

01

Meaning of Subscription

The subscription is the amount of money paid by a subscriber to any entity, institute, or club to remain effective in its membership over the period. It is income for receiving entity.

02

Journal Entries

Date

Accounts and Explanation

Debit $

Credit $

August 1, 2017

Cash

$216,000

Unearned Subscription Revenue (12,000 x $18)

$216,000

December 31, 2017

Unearned Subscription Revenue

$90,000

Subscription Revenue ($216,000 x 5/12)

$90,000

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Most popular questions from this chapter

How is present value related to the concept of a liability?

Assume the same information as in IFRS 17-12 except that Roosevelt has an active trading strategy for these bonds.

The fair value of the bonds at December 31 of each end-year is as follows.

2017 \(534,200 2020 \)517,000

2018 \(515,000 2021 \)500,000

2019 $513,000

Instructions

(a) Pepare the journal entry at the date of the bond purchase.

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(d) Using the maximum amount of the loss in the range.

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