Mohling Company typically sells subscriptions on an annual basis and publishes eight times a year.The magazine sells 60000 subscriptions in January at $10 each.Recording the sale of the subscriptions involves a(n)

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When subscriptions are sold, the company receives the cash upfront but the revenue must be recognized over the course of the subscription period. Therefore, the sale of 60,000 subscriptions for $10 each would result in $600,000 of cash received but only $75,000 of revenue recognized in January ($10 per subscription for 8 issues, with only one issue released in January). The remaining $525,000 of cash received ($600,000 - $75,000) would be recorded as Unearned Subscription Revenue, as the revenue has not yet been earned by providing the remaining issues. So, there would be an increase in Cash and an increase in Unearned Subscription Revenue for $600,000.

Mohling Company Typically Sells Subscriptions on an Annual Basis and Publishes