On April 1, Santa Fe, Inc

Multiple Choice

On April 1, Santa Fe, Inc. paid Griffith Publishing Company $1,548 for 36-month subscriptions to several different magazines. Santa Fe debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately.
-What adjusting entry should be made by Santa Fe, Inc. for the adjustment on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustments had been made?

A) Debit Subscription Expense $516 and credit Prepaid Subscriptions $516.
B) Debit Unearned Subscriptions $387 and credit Subscription Expense $387.
C) Debit Subscription Expense $387 and credit Cash $387.
D) Debit Prepaid Subscriptions $516 and credit Subscription Expense $516.
E) Debit Subscription Expense $387 and credit Prepaid Subscriptions $387.