Concept explainers
Adjusting for unearned (deferred) revenues P2
For each separate case, record the necessary
a. Tao Co. receives $10,000 cash in advance for four months of evenly planned legal services beginning on October 1. Tao records it by debiting Cash and crediting Unearned Revenue both for $10,000. It is now December 31. and Tao has provided legal services as planned. What adjusting entry should Tao make to account for the work performed from October 1 through December 31?
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 My 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

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Chapter 3 Solutions
CONNECT ONLINE ACCESS FOR FUNDAMENTAL AC
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