Adjusting Entries: Unearned Revenue Video Lessons

Concept

# Problem: On September 1, 20X1, Finally 18 Magazine sold a total of 600 one-year subscriptions at a price of $81 each. The accountant credited the entire amount to Unearned Revenue. When preparing the financial statements, what would be the appropriate adjusting entry on December 31, 20X1? a) Debit Unearned Revenue$48,600; Credit Subscription Revenue $16,200; Credit Prepaid Subscriptions$32,400 b) Debit Unearned Revenue $16,200; Credit Subscription Revenue$16,200 c) Debit Unearned Revenue $16,200; Credit Subscription Payable$16,200 d) Debit Unearned Revenue $32,400; Credit Subscription Revenue$32,400

###### Problem Details

On September 1, 20X1, Finally 18 Magazine sold a total of 600 one-year subscriptions at a price of $81 each. The accountant credited the entire amount to Unearned Revenue. When preparing the financial statements, what would be the appropriate adjusting entry on December 31, 20X1? a) Debit Unearned Revenue$48,600; Credit Subscription Revenue $16,200; Credit Prepaid Subscriptions$32,400
b) Debit Unearned Revenue $16,200; Credit Subscription Revenue$16,200
c) Debit Unearned Revenue $16,200; Credit Subscription Payable$16,200
d) Debit Unearned Revenue $32,400; Credit Subscription Revenue$32,400