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Oriole company sold 8520 annual subscriptions on August 1, 2017, for $17 each. Prepare Oriole’s August...

Oriole company sold 8520 annual subscriptions on August 1, 2017, for $17 each. Prepare Oriole’s August 1, 2017, journal entry and the December 31, 2017, annual entry, assuming the magazines are published and delivered monthly
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Answer #1
Journal Entries
Date Accounts Debit ($) Credit ($)
2017
August 1 Accounts receivable(8520*17) 144840
Deferred revenue 144840
(8520 Subscriptions sold for $17 each. This is deferred revenue because the revenue should be recognised only when the magazines are published and delivered. Also there is no mention of cash being received for the sale, hence the debit to Accounts receivable)
December 31 Deferred revenue [(144840*5)/12] 60350
Revenue 60350
(Revenue for the 5 months December to August recognised at the year end. The balance 7 months' revenue will be recognised next year.)
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