Question

Required 1. Complete the paragraph explaining why neamed revenues are labilities instead of revenues. In the exploration, use the following actual example: Mecano's magazine collects canh trom subscribers in advance and later delivers magazines to subscribers over a one-year period. Explain what happens to the neared subscription revenue over the course of a year as Maclean's delivers magazines to subscrbers into what account does the named subscription revenue gos Maclean's delivers magazines? 2. Give the journal entries that Maclean's would make te a. Collect $43.000 of subscription revenue in advance b. Record earning $10,000 of subscription revenue Include an explanation for each entry. Requirement 1. Complete the paragraph explaining why med revenues are instead of revenues in the explanation, use the following actual example: Machan's magazine colects cash from subscribers in advance and later delivers magazines to subscribers over a one-year period. Explain what happens to the reamed subscription revenue over the course of a year as Maclean's delivers magazines i bacters into what account does the neared cription revenue go as Maclean's delivers magazines? Uneamed revenues are liabilities because Maclean's has providing them wih magazines Receiving the cash in advance creates for Maclear's As Maclar delivers magazines to subscribers, Maclear's ears the revenue and the dollar amount of the revenue is transferred from revenues revenue Requirement 2. Give the journal entries that Maclean's would make to () collect 543,000 of subscription revenue in advance and (b) record coming $10,000 of subscription revenus Include an explanation for each oty (Record debit first then credits. Enter explanations on the last line) a. Begin by recording the entry to show Maclear's collecting subscription revenue in advance Journal Entry Date Accounts and Explanations Credit DO Choose from any list or her any number in the input fields and then continue to the next question

Answer 1

Ans.

Unearned Revenue:-

Unearned Revenue is the amount received in advance for a service or product that has yet to be provided. Unearned revenue is prepaid revenue.

Requirement:- 1

Unearned revenue are liabilities because Maclean's has received cash from subscribers before providing them with magzine. Receiving the cash in advance creates an obligation for Maclean's. As Maclean's delivers magazine to subscriber. Maclean's earns the revenue, and the dollar amount of the earned revenue is transferred from unearned revenue to earned revenue.

Requirement:- 2

(a) Begin by recording the entry to show Maclean's collecting subscription revenue in advance.

Journal Entry
Date	Accounts and Explanations	Debit	Credit
	Cash	$43,000
	Unearned Revenue		$43,000
	(To record the amount received in advance for subscription of magzine)

(b) Now record the entry to show Maclean's earning the subscription revenue.

Journal Entry
Date	Accounts and Explanations	Debit	Credit
	Unearned Revenue	$10,000
	Revenue		$10,000
	(To record service is provided and earned revenue)