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Eastside Magazine collects cash from subscribers in advance and then mails the magazines to subscribers over a one-year period.
Requirements
1. Record the journal entry to record the original receipt of $180,000 cash.
2. Record the adjusting entry that Eastside Magazine makes to record earning $8,000 in subscription revenue that was collected in advance.
3. Using T-accounts, post the journal entry and adjusting entry to the accounts involved and show their balances after adjustments. (Ignore the Cash account.)
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