Question

Required information [The following information applies to the questions displayed below.] The Tennis Times (TTT) is a publisher of magazines. Its accounting policy for subscriptions follows: Revenues Revenues from our magazine subscription services are deferred initially and later recognized as revenue as subscription services are provided. Assume TTT (a) collected $420 million in 2018 for magazines that will be distributed later in 2018 and 2019, (b) provided $204 million of services on these subscriptions in 2018, and (c) provided $216 million of services on these subscriptions in 2019. Required: 1. Using the information given, indicate the accounts, amounts, and accounting equation effects of transactions (a), (b), and (C) (Enter any decreases to assets, liabilities, or stockholders equity with a minus sign. Enter your answers in whole dollars.) Transaction Assets Liabilities Stockholders' Equity

Answer 1

1.

Transactions	Assets		=	Liabilities		+	Shareholder's Equity
(a)	Cash/Bank	$420	=	Deferred Revenue	$420	+	Revenue from Operations	0
(b)	Cash/Bank	0	=	Deferred Revenue	($204)	+	Revenue from Operations	$204
(c)	Cash/Bank	0	=	Deferred Revenue	($216)	+	Revenue from Operations	$216
Total	Cash/Bank	$420	=	Deferred Revenue	$0	+	Revenue from Operations	420

2. Journal Entries

S. No.	Date	General Journal	Debit	Credit
1	2018	Cash/Bank	$420
		Deferred Revenue		$420
		(Amount collected but service not rendered)
2	2018	Deferred Revenue	$204
		Profit & Loss A/c		$204
		(Revenue recognized in profit and loss A/c)
3	2019	Deferred Revenue	$206
		Profit & Loss A/c		$206
		(Revenue recognized in profit and loss A/c)

Note: Students can use term "Unearned Revenue" also instead of Deferred Revenue.

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