For each separate case below, follow the three-step process for adjusting the unearned revenue liability account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year.
For each separate case below, follow the three-step process for adjusting the unearned revenue liability account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For each separate case below, follow the three-step process for adjusting the unearned revenue liability account at December 31.
Step 1: Determine what the current account balance equals.
Step 2: Determine what the current account balance should equal.
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.
Assume no other
Transcribed Image Text:b. Caden started a new publication called Contest News. Its subscribers pay $24 to receive 12 monthly issues. With every new
subscriber, Caden debits Cash and credits Unearned Subscription Revenue for the amounts received. The company has 100
new subscribers as of July 1. It sends Contest News to each of these subscribers every month from July through December.
Assuming no changes in subscribers, prepare the year-end journal entry that Caden must make as of December 31 to adjust
the Subscription Revenue account and the Unearned Subscription Revenue account.
Step 1: Determine what the current account balance equals.
Step 2: Determine what the current account balance should equal.
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.
Unearned subscription
revenue
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