Question

Bradley's Miniature Golf and Driving Range Inc. was opened on March 1 by Bob Dean. These selected events and transactions occurred during March.
Mar. 1 Stockholder invested $59,000 cash in the business in exchange for common stock of the corporation
3 Purchased Snead's Golf Land for $41,200 cash. The price consists of land $22,900, building $8,310, and equipment $9,990. (Record this in a single entry.)
5 Advertised the opening of the driving range and miniature golf course, paying advertising expenses of $1,560 cash
6 Paid cash $3,500 for a 1-year insurance policy.
10 Purchased golf clubs and other equipment for $4,800 from Tahoe Company, payable in 30 days
18 Received golf fees of $1,550 in cash from customers for golf services performed
19 Sold 105 coupon books for $10 each in cash. Each book contains 10 coupons that enable the holder to play one round of miniature golf or to hit one bucket of golf balls. (Hint: The revenue should not be recognized until the customers use the coupons.)
25 Paid a $420 cash dividend. 30 Paid salaries of $810.
30 Paid Tahoe Company in full for equipment purchased on March 10.
31 Received $800 in cash from customers for golf services performed
Journalize the March transactions. Bradley's records golf fees as service revenue. (Record journal entries in the order presented in the problem.)

Answer 1

Answer:

Mar. 1

Cash $59,000 (debit)

Common Stock $59,000 (credit)

Mar. 3

Land $22,900  (debit)

Building $8,310 (debit)

Equipment $9,990 (debit)

Cash $41,200 (credit)

Mar. 5

Advertising expenses $1,560 (debit)

Cash $1,560  (credit)

Mar. 6

Prepaid Insurance $3,500 (debit)

Cash $3,500 (credit)

Mar. 10

Equipment $4,800 (debit)

Account Payable : Tahoe Company $4,800 (credit)

Mar. 18

Cash $1,550 (debit)

Sales Revenue $1,550 (credit)

Mar. 19

Cash $1,050 (debit)

Unearned Revenue $1,050 (credit)

Mar. 25

Dividend $420 (debit)

Cash $420 (credit)

Mar. 30

Salaries Expenses $810 (debit)

Cash $810 (debit)

Mar. 30

Account Payable : Tahoe Company $4,800 (debit)

Cash $4,800 (credit)

Mar. 31

Cash $800 (debit)

Service Revenue $800 (credit)

Explanation:

Note the following :

1.The cash earned from coupon books is posted to a Liability account : Unearned Revenue instead of Sales Revenue Account. This is because revenue is recognized until customers use the coupons.

2. Repayment of an Account Payable decreases both the Assets of Cash and the Liability of Accounts Payables.