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On April 1, Garcia Publishing Company received $28,980 from Otisco, Incorporated for 36-month subscriptions to several different magazines. The company credited Unearned Revenue for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year

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abiolataiwo2015

The adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year is: Debit Unearned Fees, $7,245; credit Fees Earned, $7,245.

Adjusting journal entry

Based on the information given the appropriate adjusting journal entry to record the transaction will be:

Garcia Publishing Company adjusting journal entry

Debit Unearned Fees $7,245

Credit Fees Earned, $7,245

($28,980×9/36)

April 1 -December 31=9 months

Inconclusion the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year is: Debit Unearned Fees, $7,245; credit Fees Earned, $7,245.

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