The Following Ledger Accounts Are Used by the Runway Race

question 165

Essay

The following ledger accounts are used by the Runway Race Track:
Cash
Accounts Receivable
Prepaid Printing
Prepaid Rent
Unearned Admissions Revenue
Note Payable
Interest payable
Admissions Revenue
Concessions Revenue
Interest Expense
Printing Expense
Rent Expense
Instructions
For each of the transactions below, prepare the journal entry (if one is required) to record the initial transaction and then prepare the adjusting entry, if any, required on November 30, the end of the fiscal year.
a. On November 1, paid rent on the track facility for three months, $105,000.
b. On November 1, sold season tickets for admission to the racetrack. The racing season is year-round with 25 racing days each month. Season ticket sales totalled $900,000.
c. On November 1, borrowed $150,000 from their bank by issuing a 6% note payable due in three months. Interest is payable at maturity.
d. On November 5, schedules for 20 racing days in November, 25 racing days in December and 15 racing days in January were printed for $3,000.
e. The accountant for the concessions company reported that gross receipts for November were $140,000. Ten percent is due to Runway and will be remitted by December 10.

Understand the concept of warranties and the responsibilities of transferors and presenters.

Recognize the validity and authentication methods of signatures on negotiable instruments.

Comprehend the process and requirements for the presentment of negotiable instruments.

Understand the consequences of dishonor of a negotiable instrument.

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Definitions:

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