For each separate case, record an adjusting entry (if necessary).
a. Lonzo Co. receives $3,000 cash in advance for six months of sustainable recycling services on September 1 and records it by debiting Cash and crediting Unearned Revenue for $3,000. Lonzo provides sustainable recycling services monthly as promised.Prepare the December 31 year-end adjusting entry that Lonzo records for the work performed from September 1 through December 31.
b. Tío launched a two-week promotion ending March 31 for its digital magazine, Sustainability Today. This one-time promotion allows subscribers to pay $20 up front and receive 12 monthly issues from April through the following March. For thispromotion, Tío debits Cash and credits Unearned Subscription Revenue for the amount received. Tío has 300 new subscribers asof April 1, and it sends Sustainability Today to each of them monthly from April through March. Prepare the December 31 year-end entry that Tío records to adjust the Subscription Revenue and the Unearned Subscription Revenue accounts.
