Question

Warren Marina owns a large marina that contains numerous boat slips of various sizes. Warren contracts with boat owners to provide slips to house the customers’ boats. Lucky Fisherman Fleet contracted with Warren to provide space for four of its fishing boats. The contract specifies that Lucky Fisherman’s boats will be kept in identified slips in the marina. However, Warren has the right to shift the boats to other slips within its marina at its discretion, subject to the requirement to provide 45-foot slips per boat for a three-year period. Warren frequently rearranges its customers’ boats to meet the needs of new contracts. Costs of reallocating space is low relative to the benefits of being able to accommodate more customers and their specific requests. Lucky Fisherman Fleet paid $17,000 on March 1, 2021, for the first year’s accommodations. The market rate of interest is 7%.

Required:
Prepare the appropriate entry(s) for Lucky Fisherman Fleet at March 1, the commencement of the agreement. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Meanwhile the books of Lucky Fisherman Fleet, the agreement to hold 4 of its fishing boats in the marina of Warren. The agreement to hold the boat is for 3 years time.
Covering initiation of 1st year on 01st March 2021 Lucky fisherman formation spent an expense of $ 17,000.Because no additional data is given, it is estimated that this price stands for all 4 boats,
Journal entry which Lucky Fisherman will relinquish is :
Bank account Dr 17,000
To Warren Marina Cr (17,000).