Question

What would be the journal entry for each of the listed transactions? For each transaction, how Cedar Fair’s assets, liabilities, and equity would be impacted by each individual transaction?

Answer 1

Answer:

Following are the transactions and their effects on Cedar's balance sheet

May 1: Sell admission tickets, $100,000, cash

Transaction:

Sell admission ticket- Debit

Cash- Credit

Impact

the sell tickets shall increase the expense and decreasing the reserves and cash will be credited resulting in decreasing the current assets,

May 3: Purchase merchandise inventory, $5,000, on account

Transaction:

Purchase Inventory- Debit

Accounts payable- Credit

Impact

both will result in increasing in current assets and current liabilities.

May 6: Rent lockers to guests, $500, cash

Transaction:

Rent lockers- Debit

Cash- Credit

Impact

the rent lockers shall increase the expense and decreasing the reserves and cash will be credited resulting in decreasing the current assets,

May 15: Pay employees, $75,000, cash

Transaction:

Pay employee- Debit

Cash- Credit

Impact

the Pay employee shall increase the expense and decreasing the reserves and cash will be credited resulting in decreasing the current assets,

May 20: Borrow money from bank by signing a six-month note, $200,000

Transaction:

Cash- Debit

Note Payable- Credit

Impact

both will result in increasing in current assets and current liabilities.