Valenti Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subsc
ID: 2478157 • Letter: V
Question
Valenti Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2014, Valenti sells 6,300 subscriptions for cash, beginning with the December issue. Valenti prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. The company has a December 31 year-end. Prepare the adjusting entry at March 31, 2015, to record subscription revenue in the first quarter of 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Explanation / Answer
bank a/c dr. 1,76,400
to subscription a/c 1,76,400
(being subscriptions made for cash)
subscription a/c dr. 44,100
to trading a/c 44,100
(being income for the quarter tranferrred to trading a/c)
subscription a/c dr. 1,32,300
to subscription unearned a/c 1,32,300
(being income not yet accrued)
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