On April 1,ABAC Farms, Inc. paid Goliath Publishing Company $1,548 for 36-month subscriptions to several different magazines. ABAC's accountant debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. What adjusting entry should be made by ABAC Farms, Inc. for the adjustment on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustments had been made?

Question 3 options:

	Debit Subscription Expense $516 and credit Prepaid Subscriptions $516.
	Debit Prepaid Subscriptions $516 and credit Subscription Expense $516.
	Debit Subscription Expense $387 and credit Cash $387.
	Debit Unearned Subscriptions $387 and credit Subscription Expense $387.
	Debit Subscription Expense $387 and credit Prepaid Subscriptions $387.

Question 4

On April 1, ABAC Farms, Inc. paid Goliath Publishing Company $1,548 for 36-month subscriptions to several different magazines. ABAC's accountant debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. What amount should appear in the Prepaid Subscription account for ABAC Farms, Inc. after adjustments on December 31 of the second year assuming the company is using a calendar-year reporting period and the previous year adjustment had been made?

Question 4 options:

	$1,548.
	$387.
	$516.
	$645.
	$0.

Question 5

On April 1, ABAC Farms, Inc. paid Goliath Publishing Company $1,548 for 36-month subscriptions to several different magazines. ABAC's accountant debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. What amount should appear in the Prepaid Subscription account for ABAC Farms, Inc. after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made?

Question 5 options:

	$1,548.
	$387.
	$516.
	$1,161.
	$0.

Question 6

On April 1, Goliath Publishing Company received $1,548 from ABAC Farms, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, What is the adjusting entry that should be recorded by Goliath Publishing Company on December 31 of the second year?

Question 6 options:

	debit Unearned Fees, $1,548; credit Fees Earned, $1,548.
	debit Unearned Fees, $516; credit Fees Earned, $516.
	debit Unearned Fees, $1,161; credit Fees Earned, $1,161.
	debit Unearned Fees, $129; credit Fees Earned, $129.
	debit Unearned Fees, $387; credit Fees Earned, $387.

Question 7

ABAC Farms paid $4,800 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The balance in the prepaid insurance account before adjustment at the end of the year is $4,800 and no adjustments had been made previously. The adjusting entry required on December 31 is:

Question 7 options:

	Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.
	Debit Prepaid Insurance, $2,400; credit Insurance Expense, $2,400.
	Debit Insurance Expense, $1,200; credit Prepaid Insurance, $1,200.
	Debit Prepaid Insurance, $1,200; credit Insurance Expense, $1,200.
	Debit Cash, $4,800; Credit Prepaid Insurance, $4,800.