Question

The Fluffy Bunnies, a semi-professional baseball team, prepares financial statements on a monthly basis. Its season begins in April, but in February the team engaged in the following transactions:
1.  Paid $200,000 to the city of Toronto as advance rent for use of a stadium for the six-month period April 1 through September 30.
2.  Collected $600,000 cash from sales of season tickets for the team's 20 home games. This amount was credited to Unearned Ticket Revenue.

During the month of April, the Fluffy Bunnies played four home games and three road games.

Instructions
Prepare the adjusting entries required at April 30 for the transactions above.

Answer 1

Sol:-

Date	Event	Account Title and Explanation	Debit	Credit
30-Apr	(a)	Rent Expense ($200,000*1/6)   Dr	$33,333.00
		To Prepaid Rent		$33,333.00
		( To record rent expense for the month of april)
30-Apr	(b)	Unearned Ticket Revenue Dr ($600,000*4/20)	$120,000.00
		To Ticket revenue		$120,000.00
		(To record ticket revenue earned for the month of April)