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

Question

Joslyn Santiago

Business

6 May, 22:58

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

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Answers (1)

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Kasey Hutchinson · Answer 1

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