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16 March, 17:23

Ticketsales, Inc., receives $7,760,000 cash in advance ticket sales for a four-date tour of Bon Jovi. Record the advance ticket sales on October 31. Record the revenue earned for the first concert date of November 5, assuming it represents one-fourth of the advance ticket sales. Ticketsales, Inc. initially records prepaid and unearned items in balance sheet accounts.

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  1. 16 March, 17:34
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    The Journal entries are as follows:

    (i) On October 31,

    Cash A/c Dr. $7,760,000

    To Unearned ticket revenue A/c $7,760,000

    (To record the Unearned ticket revenue)

    (ii) On November 5,

    Unearned ticket revenue A/c Dr. $1,940,000

    To Earned ticket revenue $1,940,000

    (To record the one-fourth of the advance ticket sales)

    Working notes:

    Unearned ticket revenue:

    = $7,760,000 * (1/4)

    = $1,940,000
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