In December, 2011, Quebecor Printing received magazine subscriptions for 2012 from a customer, who paid $500 in cash. What would be the appropriate journal entry for this event?

Question

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Since the cash was received for the magazine subscriptions for the year 2012, it is considered unearned revenue until the publications are delivered. Therefore, the appropriate journal entry is to debit cash and credit unearned revenue. Option A is incorrect because subscription revenue should be credited only when the magazines are delivered. Option C is incorrect because it records only a portion of the cash received, and the account debited should be unearned revenue instead of subscription revenue. Finally, option D is incorrect because a transaction has occurred, and a journal entry should be made to record it.

In December, 2011, Quebecor Printing Received Magazine Subscriptions for 2012