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 $16,500 on March 1, 2021, for the first year's accommodations. The market rate of interest is 6% 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.) View transaction list Journal entry worksheet Record the payment of $16,500 on March 1, 2021, for the first year's accommodations Note: Enter debits before credits Date General Journal Debit Credit March 01, 2021 Record entry Clear entry View general Journal

Answer 1

NOTE: This Entry is for first year payment only.

Journal Entry for first payment on March1,2021

DATE	GENERAL JOURNAL	DEBIT	CREDIT
March1,2021	Accomodation or Warren Marina a/c	$16,500
	Bank a/c		$16,500
	(accomodation rent paid for 1st year to Warren Marina)

Expenses are debited and Bank a/c is credied as the outflow of asset

THIS JOURNAL ENTRY IS FOR FIRST YEAR ONLY, FOR OTHER YEAR PAYMENTS SCENARIO WILL BE CHANGED, AS ACCORDING THE QUESTION, FIRST YEAR ENTRY IS PROVIDED

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