New York Enterprises provides advertising services to travel agencies. The company bills annually and receives payments in advance. All advertising is earned equally each month. In January, the company received $120,000; in February, it received $144,000. The company recorded Advertising Revenue of $264,000. The fiscal year ends on February 28.
Required:
1. How much revenue should be recognized from these contracts on February 28?
2. What adjusting entry will be required on February 28?

Question

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The Answer of New York Enterprises provides advertising services to travel agencies. The company bills annually and receives payments in advance. All advertising is earned equally each month. In January, the company received $120,000; in February, it received $144,000. The company recorded Advertising Revenue of $264,000. The fiscal year ends on February 28.
Required:
1. How much revenue should be recognized from these contracts on February 28?
2. What adjusting entry will be required on February 28?

New York Enterprises Provides Advertising Services to Travel Agencies