qs 11-4 (algo) unearned revenue lo c2\nticketsales, incorporated, receives $5,440,000 cash in advance ticket…
qs 11-4 (algo) unearned revenue lo c2\nticketsales, incorporated, receives $5,440,000 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, incorporated initially records prepaid and unearned items in balance sheet accounts.\nview transaction list\njournal entry worksheet\n1 2\nrecord the cash receipt in advance of concerts.\nnote: enter debits before credits.\ndate general journal debit credit\noctober 31
Answer
Explanation:
Step1: Record cash receipt
When cash is received in advance for ticket sales, cash is debited and unearned revenue is credited. Cash increases (debit) and a liability (unearned revenue) is created (credit). Debit: Cash $5,440,000$; Credit: Unearned Revenue $5,440,000$
Step2: Record revenue earned
When the first - concert date occurs and one - fourth of the advance ticket sales is earned, unearned revenue is debited (decrease in liability) and revenue is credited (increase in revenue). The amount of revenue earned is $\frac{5440000}{4}=1360000$. Debit: Unearned Revenue $1,360,000$; Credit: Ticket Revenue $1,360,000$
Answer:
| Date | General Journal | Debit | Credit |
|---|---|---|---|
| October 31 | Cash | $5,440,000$ | |
| Unearned Revenue | $5,440,000$ | ||
| November 5 | Unearned Revenue | $1,360,000$ | |
| Ticket Revenue | $1,360,000$ |