Question

The Tennis Times (TTT) is a publisher of magazines. Its accounting policy for subscriptions follows:RevenuesRevenues from our magazine subscription services are deferred initially and later recognized as revenue as subscription services are provided.Assume TTT (a) collected $490 million in 2018 for magazines that will be distributed later in 2018 and 2019, (b) provided $239 million of services on these subscriptions in 2018, and (c) provided $251 million of services on these subscriptions in 2019.

Answer 1

Question requires the journal entries to record a, b and c.

a.

Date Account Title Debit Credit

2018 Cash $490,000,000

Unearned revenue $490,000,000

b.

Date Account Title Debit Credit

2018 Unearned revenue $239,000,000

Service revenue $239,000,000

c.

Date Account Title Debit Credit

2019 Unearned revenue $251,000,000

Service revenue $251,000,000