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Problem - Unearned revenues - subscription fees. Evans Ltd. publishes a monthly newsletter for retail marketing managers and requires its subscribers to pay $50 in advance for a one-year subscription. During the month of September 2010, Evans Ltd. Sold 200 one-year subscriptions and received payments in advance from all new subscribers. Only 120 of the new subscribers paid their fees in time to receive the September newsletter; the other subscriptions began with the October newsletter.
a. Use the horizontal model (or write the journal entries) to record the effects of the following items:
1. Subscription fees received in advance during September 2010.
2. Subscription revenue earned during September 2010.
b. Calculate the amount of subscription revenue earned by Evans Ltd. during the year ended December 31, 2010, for these 200 subscriptions.
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