Evans Ltd. publishes a monthly newsletter for retail marketing managers and requ

Question

Evans Ltd. publishes a monthly newsletter for retail marketing managers and requires its subscribers to pay $25 in advance for a one-year subscription. During the month of August 2016, Evans Ltd. sold 270 one-year subscriptions and received payments in advance from all new subscribers. Only 81 of the new subscribers paid their fees in time to receive the August newsletter; the other subscriptions began with the September newsletter.

a-3. Record the journal entry to show the effect of subscription fees received in advance and Subscription revenue earned during August 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Cash a/c (270*25) 6750 Unearned subscription revenue a/c 6750 (TO record advance received) Unearned subscription revenue a/c 2025   subscription revenue a/c (81*25) 2025 (To record august revenue)

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