Solution: 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

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