On April 1, Garcia Publishing Company received $17,280 from Otisco, Incorporated for 36-month subscriptions to several different magazines. The company credited Unearned Revenue 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?
Multiple Choice:
Debit Unearned Revenue, $4,320; Credit Subscription Revenue, $4,320.
Debit Unearned Revenue, $1,440; Credit Subscription Revenue, $1,440.
Debit Unearned Revenue, $5,760; Credit Subscription Revenue, $5,760.
Debit Unearned Revenue, $12,960; Credit Subscription Revenue, $12,960.
Debit Unearned Revenue, $17,280; Credit Subscription Revenue, $17,280.