Answer:
1. Unearned subscription revenue A/c Dr
To Subscription revenue
(Being the unearned amount is recorded)
2. $30,250
Explanation:
1. The adjusting entry is shown below:
Unearned subscription revenue A/c Dr
To Subscription revenue
(Being the unearned amount is recorded)
The computation is shown below:
= Annual subscription sold × number of months ÷ total number of months in a year
= $33,000 × 1 month ÷ 12 month
= $2,750
The one month is calculated from December 2019 to January 2020
2. The computation of the unearned revenue is shown below:
= Annual subscription sold - one month amount
= $33,000 - $2,750
= $30,250
