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 reporting period and no previous adjustments had been made?

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