Question

The Monks, a minor league baseball team, prepare financial statements on a monthly basis. Their season begins in April, but in March the team engaged in the following transactions:

(a) Paid $240,000 to San Diego as advance rent for use of San Diego Stadium for the six month period April 1 through September 30.

(b) Collected $480,000 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 Monks played five home games and four road games.

Prepare the adjusting entries required at April 30 for the transactions above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.

Account Titles and Explanation

Debit

Credit

(a)

(b)

Answer 1

31.Mar	Prepaid Stadium Rent	a	Dr.	240000
	Bank		Cr.		240000
	(being rent received in advance for 6 months from April to September)
31.Mar	Bank	b	Dr.	480000
	Unearned Ticket Revenue		Cr.		480000
	(Being ticket revenue received in advance for 20 home games)
30.Apr	Stadium Rent Expense	a	Dr.	40000
	Prepaid Stadium Rent		Cr.		40000
	(being rent expense ammortised for the month of April out of the 6 month advance = 240000/6)
30.Apr	Unearned Ticket Revenue	b	Dr.	120000
	Ticket Revenue		Cr.		120000
	(Being revenue recognised for 5 home games out of the advance money received out of ticket sales for 20 home games = 480000*5/20)