Celebraty Printings sold annual subscriptions to their magazine for $33000 in December 2015. The magazine is published monthly. The new subscribers received their first magazine in January 2016.
1. What adjusting entry should be made in January if the subscriptions were originally recorded as a liability?
2. What amount will be reported on the January 2016 balance sheet for Unearned Subscription Revenue?

Unearned Subscription Revenue

Income received from subscriptions before the service has been fully delivered or the term of the subscription has been fulfilled.

Liability

Financial obligations or debts that an entity owes to another party, which need to be settled over time through the transfer of economic benefits including money, goods, or services.

Adjusting Entry

An adjusting entry, in accounting, is utilized to update the records for expenses and revenues that have accrued but not yet been recorded in the general ledger by the end of an accounting period.