The large monthly ProSport Magazine sells two year subscriptions daily throughout the year. The sales are made by phone and internet and the customer credit card is charged for the full amount. Each daily batch of subscriptions is accounted for separately. On August 1, 2021 the company sold 12,000 two year subscriptions. The first magazine from the subscription comes one month after the subscription is paid for. Each subscription costs the customer $18.00 with no sales tax, and ProSport pays a credit card fee of 2.5%. Finally, the company recognizes revenue from the sales of their magazines when it with each issue shipped on the last day of each month.

Required:

Assuming the company gets its cash almost immediately from the credit card company:

1. Calculate the total amount of cash received by the company

2. Calculate the amount of fees paid to the credit cards company.

3. Give the journal entry for this transaction as of 8/1/21 (Hint: think deferred income)

4. Calculate the revenue earned per month, and give the journal entry recognizing subscription revenue for the month of December 2021. What is the Amount in the Subscription Liability at the end of 2021 (Hint Think t-account)