Question

During the month of September, the Texas Go-Kart Company had the following business activities: a. On September 1, paid rent on the track facility for six months at a total cost of $7,200. b. On September 1, received $45,600 for season tickets for 12-month admission to the race track. On September 1, booked the race track for a private organization that will use the track one day per month for $1,700 each time, to be paid in the following month. The organization uses the track on September 30. d. On September 1, hired a new manager at a monthly salary of $2,300, to be paid the first Monday following the end of the month. Required: 1. Prepare the journal entry, if any, required to record each of the initial business activities on September 1 2. Prepare the adjusting journal entries, if any, required on September 30

Answer 1

Answer:

Explanation:

a)

Sept.1

Dr Prepaid rent 7200

   Cr Cash 7200

Sept.30

Dr Rent expense (7200/6) 1200

    Cr Prepaid rent 1200

b)

Sept.1

Dr Cash 45,600

   Cr Unearned revenue 45,600

Sept.30

Dr Unearned revenue (45,600/12) 3800

   Cr Ticket revenue 3800

d)

Sept.1 - no journal entry

Sept.30

Dr Salary expense 2300

    Cr Salaries payable 2300