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On April 1, Griffith Publishing Company received $27,180 from Santa Fe, 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 Griffith Publishing Company on December 31 of the first year

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Answer:

Debit Unearned Fees, $6,795; credit Fees Earned, $6,795.

Explanation:

Based on the information given the appropriate adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the first year will be :

Debit Unearned Fees $6,795

Credit Fees Earned $6,795

[$27,180/36 months*9 months]

April 1 to December 31=9 months

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