Answer and Explanation:
the journal entries are as follows:
a Prepaid rent $213,000
To cash $213,000
(To record prepaid rent)
Adjusting entry:
Rent expense $71,000 ($213,000 ÷ 3)
Prepaid rent $71,000
(To record September rent expense)
b Cash $840,000
To unearned sales revenue $840,000
(To record cash received on season sales)
Adjusting entry:
Unearned sales revenue ($840,000 ÷ 12) $70,000
Sales revenue $70,000
(To record sales revenue recognised)
c Cash $300,000
Note payable $300,000
(To record note payable issued on borrowed amount )
Adjusting entry:
Interest expense ($300,000 × 6% ÷ 12) $1,500
Interest payable $1,500
(To record interest payable due)
d Prepaid advertising 3,500
To Cash 3,500
(To record cash paid for advertising)
Adjusting entry:
Advertising expense ($3,500 ÷ 60) × 20 $1,167
To prepaid advertising $1,167
e No entry
Adjusting entry:
Accounte receivable ($160,000 × 8%) $12,800
Sales revenue $12,800
(To record amout due)
