A company received $5 000 for 100 one- year subscriptions on 1 July. The journal entry to record this cash receipt would include a:
A)credit to Unearned revenue.
B)debit to Prepaid expenses.
C)debit to Unearned revenue.
D)credit to Cash.

Question

Quizplus · Accepted Answer

The company received cash for services not yet performed, so it should credit Unearned Revenue to recognize the liability for the future service obligation.

A Company Received $5 000 for 100 One- Year Subscriptions