For each of the following independent situations, prepare journal entries to record the initial transaction on December 31 and the adjustment required on January 31.a. Magnificent Magazines received $12,000 on December 31, 2015, for subscription servicesrelated to magazines that will be published and distributed in January through December 2016.b. Walker Window Washing paid $1,200 cash for supplies on December 31, 2015. As of January 31,2016, $200 of these supplies had been used up.c. Indoor Raceway received $3,000 on December 31, 2015, from race participants for providingservices for three races. One race is held January 31, 2016, and the other two will be held inMarch 2016
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
For each of the following independent situations, prepare
a. Magnificent Magazines received $12,000 on December 31, 2015, for subscription services
related to magazines that will be published and distributed in January through December 2016.
b. Walker Window Washing paid $1,200 cash for supplies on December 31, 2015. As of January 31,
2016, $200 of these supplies had been used up.
c. Indoor Raceway received $3,000 on December 31, 2015, from race participants for providing
services for three races. One race is held January 31, 2016, and the other two will be held in
March 2016
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