On January 1, Fashion Forward Magazine received $15,000 from subscribers for the annual subscriptions that it recorded in Unearned Subscription Revenue. The issues of the magazine are mailed to subscribers quarterly. What amount of subscription revenue should the magazine recognize on March 31 when the first issue is sent in March?
A) $1,250.
B) $3,750.
C) $15,000.
D) $7,500.
E) $0.

Question

Quizplus · Accepted Answer

Since the magazine sends out issues quarterly, one-fourth of the subscription revenue earned should be recognized in March when the first issue is sent. Therefore, the amount of subscription revenue recognized in March is $15,000/4 = $3,750. The remaining $11,250 will be recognized as revenue in June, September, and December when the subsequent issues are mailed.

On January 1, Fashion Forward Magazine Received $15,000 from Subscribers