"The owner paid $40 each for one-year subscriptions to Fishing Illustrated, Fishing Unlimited,andFish Master. The magazines are published monthly."

There are 2 accounts on the ledger. One is; "Prepaid subscriptions," the other is "Subscriptions Expense."

I don't know how to record this into the ledger.

ref. the above quote came directly out of a college accounting class book. By; heints & parry.

Thank you in advance for any help.

Quote:

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Originally Posted by age158

"The owner paid $40 each for one-year subscriptions to Fishing Illustrated, Fishing Unlimited,andFish Master. The magazines are published monthly."

There are 2 accounts on the ledger. One is; "Prepaid subscriptions," the other is "Subscriptions Expense."

I don't know how to record this into the ledger.

ref. the above quote came directly out of a college accounting class book. by; heints & parry.

thank you in advance for any help.

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OK, you would debit $40 "prepaid subscription" because you are pre-paying for 1 year subscription, and credit cash for the $40

You would only use the "subscription expense" when any amount of the prepaid subscriptions has expired.

Well like my sister said your prepaying 40 dollars per subscription. Therefore, is treat it like prepaid insurance. Once subcription expires then you will credit prepaid subscription and debit subscription expense

Well like my sister said your prepaying 40 dollars per subscription. Therefore, is treat it like prepaid insurance. Once subcription expires then you will credit prepaid subscription and debit subscription expense