New Orleans Living Magazine (NOLM) is a monthly, subscription- based magazine that has content related to local businesses, residences and neighborhoods, and cultural events. The company that publishes the magazine earns revenue from reader subscriptions. Subscriptions are $60.00 per year. Payment is collected as a lump sum at the start of a 12-month subscription period either in cash or by credit card, which the company treats as cash since electronic collections occur within 2-3 days. NOLM had 45,610 subscribers in the previous month. Of that number, 4,000 had subscription renewals due this month, of which 98% renewed and paid; 2% did not renew the subscriptions. Plus, NOLM gained 140 new subscribers this month. NOLM uses accrual accounting and complies with GAAP even though it is a private company and is not required to comply. Which explanation best describes the accounting entries that the company will book related to the payments from new and renewal subscribers and to the publication and delivery of the next monthly issue?

New Orleans Living Magazine (NOLM) is a monthly, subscriptionbased magazine that has content related to local businesses, residences and neighborhoods, and cultural events. The company that publishes the magazine earns revenue from reader subscriptions. Subscriptions are $60.00 per year. Payment is collected as a lump sum at the start of a 12-month subscription period either in cash or by credit card, which the company treats as cash since electronic collections occur within 2-3 days. NOLM had 45,610 subscribers in the previous month. Of that number, 4,000 had subscription renewals due this month, of which 98% renewed and paid; 2% did not renew the subscriptions. Plus, NOLM gained 140 new subscribers this month. NOLM uses accrual accounting and complies with GAAP even though it is a private company and is not required to comply. Which explanation best describes the accounting entries that the company will book related to the payments from new and renewal subscribers and to the publication and delivery of the next monthly issue? a. NOLM will credit its subscription revenue account for $243,600 based on the new and renewal subscriber transactions. The debit side of the entry is to the cash account. No separate accounting entry is required for the publication of the next monthly issue as all subscriber revenue is posted at the time of payment. b. NOLM will credit its unearned revenue account for $228,350 based on the new, renewal, and other existing subscribers. The debit side of the entry is to the cash account. At the publication of the next monthly issue, the subscription revenue account will be credited for $228,350 and the debit side of the entry will be to the unearned revenue account, zeroing it out. c. NOLM will credit its unearned revenue account for $243,600 based on the new and renewal subscriber transactions. The debit side of the entry is to the cash account. At the publication of the next monthly issue, the subscription revenue account will be credited for $228,350 and the debit side of the entry will be to the unearned revenue account, leaving a balance representing unearned amounts from the new, renewal, and other existing subscribers