On September 1, 2021, Gold Gaming sold 400 one-year subscriptions to its online gaming website for $90 each. The total amount received was credited to Deferred Revenue. What would be the required adjusting entry at December 31, 2021?
A) Debit Deferred Revenue and credit Service Revenue for $36,000.
B) Debit Service Revenue and credit Deferred Revenue for $24,000.
C) Debit Deferred Revenue and credit Service Revenue for $24,000.
D) Debit Deferred Revenue and credit Service Revenue for $12,000.
Answer: D
A company has a policy of paying salaries for contract labor on the 15th of the month following the labor services received. In December 2021, the company recorded $15,000 paid in salaries for labor services received in November 2021. In addition, labor services received in December 2021 were $12,000 and will be paid by the company on January 15, 2022. What adjusting entry will the company record on December 31, 2021?
A) Debit Salaries Expense and credit Salaries Payable for $27,000.
B) Debit Salaries Expense and credit Cash for $15,000.
C) Debit Salaries Expense and credit Salaries Payable for $12,000.
D) Debit Salaries Expense and credit Salaries Payable for $3,000.
Answer: C
PrimeFlix sells one-year online subscriptions for viewing classic movies. Customers are required to pay for the subscription at the beginning of the subscription period. On April 1, 2021, total sales of one-year subscriptions are $12,000. What adjusting entry does PrimeFlix need to record on December 31, 2021?
A) Debit Deferred Revenue and credit Service Revenue for $9,000.
B) Debit Deferred Revenue and credit Service Revenue for $12,000.
C) Debit Service Revenue and credit Deferred Revenue for $9,000.
D) Debit Service Revenue and credit Deferred Revenue for $12,000.
Answer: A
