On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year?
A. debit Unearned Fees, $32,580; credit Fees Earned, $32,580.
B. debit Unearned Fees, $8145; credit Fees Earned, $8145.
C. debit Unearned Fees, $10,860; credit Fees Earned, $10,860.
D. debit Unearned Fees, $24,435; credit Fees Earned, $24,435.
E. debit Unearned Fees, $2715; credit Fees Earned, $2715.
Answer: B
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