Question

1. On September 31^st, Nook received a prepayment of $20,000 cash for a contract with the following details:

• Sale of 100 widgets
• Sale of 100 1-year subscriptions of Widget Monthly Magazine

The widgets have a retail price of $25, and the monthly subscription cost of Widget Monthly Magazine is $10.

Provide the journal entries on September 30th

2. Nook shipped out the October issue of Widget Monthly Magazine on Oct 31^st 2020, the November issue on November 30^th 2020, and the December issue together with the widgets on Dec 31^st 2020.

Assuming that Nook last prepared financial statements on Sept 31^st 2020, provide the necessary adjusting entries on Dec 31^st 2020.

Answer 1