Reference no: EM132861088

Question - The following information relates to the Better Lawns and Gardens Company at the end of December 2020

The company is a publisher of a monthly lawn and garden magazine. The company's revenue comes from two main sources: advertising sold to company's that manufacture lawn and garden products, and customers who subscribe to the magazine. The company's accounting period follows a calendar year of January through December.

1. Employees are paid every Friday for the five-day week ending on that day. Salaries amount to $6,500 per week. This year, the company's current operating year concluded on Thursday, December 31, 2020.

2. A note for $3,600 was received from an advertising customer for a special one time advertising transaction on May1, 2020. The note is due in one year, plus interest at 4%.

3. On July 1, 2020, the company borrowed $48,000 cash by signing a note payable due in one year at 4% interest.

4. An insurance policy was renewed at a total premium cost of $6,000 paid in full on August 1, 2020. The premium covered a 24-month period beginning August 1, 2020.

5. On October 1, 2020, cash of $66,000 was received from subscribers (customers) for a special 36-month prepaid subscription beginning on October 1, 2020. The transaction was recorded by a debit to Cash and a credit to Unearned Subscription Revenue.

6. The Supplies account showed a balance of $870 at the beginning of 2020. Supplies costing $12,450 were purchased during 2020 and debited to the asset account supplies. Supplies of $2,160 were still on hand at December 31, 2020.

Required - Prepare in journal entry form, the necessary year end December 31, 2020 adjustments based on the information above.