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Computation of revenue earned during the period.
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 2009, 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) Write the journal entries to record the effects of the following items: (i) subscription fees received in advance during September 2009. (ii) Subscription revenue earned during September 2009.
b) Calculate the amount of subscription revenue earned by Evans Ltd. during the year ended December 31, 2009, for these 200 subscriptions.
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