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P8-7 (Algo) Determining Financial Statement Effects of Deferred Revenues L08-1 A. Deferred revenues-customer deposits Eastern Brewing Company (EBC) distributes its products in an aluminum keg. Customers are charged a deposit of \$29 per keg, and deposits received from customers are recorded in the keg deposits account. Required: 1. This part of the question is not part of your Connect assignment. 2. A production specialist who works for EBC estimates that 70 kegs for which deposits were received during the year will never be returned. How would the deposits related to these 70 kegs be reflected in the company's financial statements? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) B. Deferred revenues-rent On September 1, year 1, Noreen Ltd, collected $75,600 in cash from its tenant as an advance rent payment on its store location. The six-month lease period ends on February 28, year 2 , at which time the lease contract may be renewed. Noreen's fiscal year ends on December 31 . Required: 1. Prepare journal entries to record the collection of rent on September 1 , year 1 , and the related adjustment for the amount of rent earned during year 1 . (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. If the amount received on September 1, year 1 , had covered a period of 18 months, how should Noreen report the deferred rent mount on its statement of financial position as at December 31, year 1? Answer is complete but not entirely correct. c. Deferred revenues-subscription fees Tremblay inc. publishes a monthly newsletter for retail marketing managers and requires its subscribers to pay $108 in advance for a one-year subscription, During the month of April of the current year, Tremblay Inc. sold 165 one-year subscriptions and recelved payments in advance from all new subscribers. Only 70 of the new subscribers paid their fees in time to receive the April newsletter. The other subscribers recelved the newsletter in May. Required: Prepare joumal entries to record the subscription fees received in advance during April of the current year, and the related adjusting entry to recognize the subscription revenue earned during April of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)