Question

Jungle Publishing completed the following transactions for one subscriber during 2018: (Click the icon to view the transactions.) Requirement 1. Journalize these transactions (explanations not required). Then report any liability on the company's balance sheet at December 31, 2018. (Record debits first, then credits. Exclude explanations from journal entries.) Start by journalizing the October 1st transaction. Recall Jungle Publishing sold a one-year subscription, collecting cash of $2,000, plus sales tax of 12%. Journal Entry Accounts Date Debit Credit Oct Next, journalize the November 15th transaction. Recall Jungle Publishing remitted (paid) the sales tax to the state of New York. Journal Entry

Answer 1

1) Sold a six-month subscription (starting on October 1), collecting cash of $2000 plus sales tax of 12%
Date	Accounts and Explanation	Debit	Credit
Oct 3	Cash	$2,240.00
	Unearned Revenue		$2,000.00
	Sales Tax Payable (2000 x 12%)		$240.00
2) Remitted (paid) the sales tax to the state of Tennessee
Nov.15	Sales Tax Payable	$240.00
	Cash		$240.00
Made the necessary adjustment at year-end to record the amount of subscription revenue earned during the year
Dec.31	Unearned Revenue ($2000/6 months) x 3months	$1,000.00
	Subscription Revenue		$1,000.00
Balance sheet (partial)
December 31St
Current Liabilities
Unearned Revenue	$1,000.00