A company received $5,000 for 100 one-year subscriptions on July 1.The journal entry to record this cash receipt would include a:
A) debit to Unearned revenue.
B) debit to Prepaid expenses.
C) credit to Unearned revenue.
D) credit to Cash.

Question

Quizplus · Accepted Answer

The company received cash for subscriptions, which are an obligation to deliver goods or services in the future, so it should be recorded as unearned revenue until the services are provided. Therefore, the journal entry would include a credit to Unearned revenue.

A Company Received $5,000 for 100 One-Year Subscriptions on July