Answered

On March 31, 2009, Phoenix, Inc. paid Melanie Publishing Company $15,480 for a 3-year subscription for five different magazines. The subscriptions started immediately. What amount should appear in the Prepaid Subscription account for Phoenix Company after adjustments on December 31 each year

Answer :

TomShelby

Answer:

prepaid subscrption ending balance

2009 11,610

2010 6,460

2011  1,290

Explanation:

15,480 / 36 months = 430 per month

December 31th Adjustment:

430 x 9 months (from March 31,2009 to December 31,2009)

received magazinesfor $ 3,870

balance: 15,480 - 3,870 = 11,610

Decmeber 31th 2010

430 x 12 months = 5,160

balance 11,610 - 5,160 = 6,450

2011 adjustment

again for 12 months: 5,160

6,450 - 5,160 = 1,290

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