Accounting pre-test. No grade

Print Item PRACTICE EXERCISE 1 LO1 According to the revenue recognition principle, revenues are recorded when they are earned. The receipt of cash and the earning of revenue may occur at different times. For revenue received in advance, an adjustment is required to separate the portion that has been earned from the portion that is unearned. We assume that the amount of cash received in advance was originally recorded as unearned revenue, which is a liability. In the adjusting entry for the amount actually earned, debit the unearned revenue account (for example, Unearned Course Fees) and credit the revenue account (such as Course Fees Income). On June 1, Madison Community Magazine receives $75,850 in cash for magazine subscriptions covering two years. At the end of the year, December 31, M.C. Magazine finds that $57,600 of the magazine subscriptions have been earned. Record in general journal form (a) the original receipt of cash on June 1 and (b) the year-end adjusting entry for Madison Community Magazine. GENERAL JOURNAL PAGE 1 DATE DESCRIPTION POST. REF. DEBIT CREDIT Jun. 1 Dec. 31