I have this hw question regarding unearned revenue.
There's 2 transactions:

Sept 1 Sold 1800 one year subscriptions for cash at 12 each.
Sept 30 Sold 400 more one year subscriptions for cash at 12 each. These subscriptions begin on Oct 1.

I'm supposed to adjust and recognized the revenue earned at the end of the month.

I'm thinking that the answer is:

Unearned Revenue 1,800
Subscription Revenue 1,800

but when i looked at my text, it has an example in which it adjusted a transaction where a 1 year subscription is sold on the Sept 20th and recognizes the revenue at the end of the month. My text doesn't go into detail about this but states "for simplicity, one month of revenue is recognized even though the subscriptions were sold on the 20th."

If i go by that, would it be:

Unearned Revenue 2200
Subscription Revenue 2200

CaptainForest

Your way is correct.
Dr. Unearned Revenue 1,800
Cr. Revenue 1,800


As for your text book, the author is trying to be lazy. Well, perhaps not lazy, but perhaps just trying to simplify things. Although I disagree with the author. Perhaps using half a month, ok, but a full month, no.

morgaine300

I have to disagree here with two things.

One, I don't think the author is being lazy. If we assume these are for a monthly magazine/paper, whatever it is, then the difference in dates is nothing to worry about. If they've shipped the thing for the month, that's for the entire month and date doesn't matter. However, if something is purchased 9/20 like the example, it also ought to explicitly state when the subscriptions are shipped. (i.e. is there actually something sent in Sept?)

And blankman, notice the 9/30 ones says the subscriptions don't start until October? The example in the book ends up being irrelevant because the subscriptions were never sent in September. It's not the date that's important here. It's the month.