Question

sells one-year online subscriptions for viewing classic movies. Customers are required to pay for the subscription at the beginning of the subscription period. On April 1, 2021, total sales of one-year subscriptions are $12,000. What adjusting entry does WatchTV need to record on December 31, 2021

Answer 1

a. Debit deferred revenue and credit service revenue for $9000.

Step-by-step explanation:

Note: The full question is attached as below

Subscription earned for 9 months = $12000 / 12 * 9

Subscription earned for 9 months = $9,000

Date Account titles Debit Credit

Dec 31, 2021 Deferred revenue $9,000

To Service revenue $9,000