Question

For each of the following independent situations, prepare journal entries to record the initial transaction on December 31 and the adjustment required on January 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) a. Magnificent Magazines received $8.400 on December 31, 2018, for subscription services related to magazines that will be published and distributed in January through December 2019 b. Walker Window Washing paid $840 cash for supplies on December 31, 2018. As of January 31, 2019, $140 of these supplies had been used up. c. Indoor Raceway received $2,100 on December 31, 2018, from race participants for providing services for three reces. One race Is held in January 31, 2019, and the other two will be held in March 2019

Answer 1

1. Dec 31

Dr Cash $8,400

Cr Unearned subscription revenue $8,400

2. Jan 31

Dr Unearned subscription revenue $700

Cr Subscription revenue $700

3. Dec 31

Dr Supplies $840

Cr Cash $840

4. Jan 31

Dr Supplies expense $140

Cr Supplies $140

5. Dec 31

Dr Cash $2,100

Cr Unearned service revenue $2,100

6. Jan 31

Dr Unearned service revenue $700

Cr Service revenue $700

Step-by-step explanation:

Preparation of the journal entries to record the initial transaction on December 31 and the adjustment required on January 31

1. Dec 31

Dr Cash $8,400

Cr Unearned subscription revenue $8,400

2. Jan 31

Dr Unearned subscription revenue $700

($8,400/12)

Cr Subscription revenue $700

3. Dec 31

Dr Supplies $840

Cr Cash $840

4. Jan 31

Dr Supplies expense $140

Cr Supplies $140

5. Dec 31

Dr Cash $2,100

Cr Unearned service revenue $2,100

6. Jan 31

Dr Unearned service revenue $700

($2,100/3)

Cr Service revenue $700