Question

E4-3 Recording Initial Transactions and Subsequent Adjustments [LO 4-1, LO 4-2] During the month of September, the Texas Go-Kart Company had the following business activities: a on September 1. paid rent on the track facility for six months at a total cost of $12,000. b. On September 1, received $55,200 for season tickets for 12-month admission to the race track. c. On September 1, booked the race track for a private organization that will use the track one day per month for $1,900 each time, to be paid in the following month. The organization uses the track on September 30, d. On September 1, hired a new manager at a monthly salary of $3,100, to be paid the first Monday following the end of the month. Required: 1. Prepare the journal entry, if any, required to record each of the initial business activities on September 1 2. Prepare the adjusting journal entries, if any, required on September 30. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry, If any, required to record each of the initial business activities on September 1. (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 1 2 3 4 Record the payment of rent on the track facility for six months at a total cost of $12,000 Note: Enter debits before credits General Journal Date September 01 Debit Credit

Answer 1

1

Transaction	Date	Particulars	Debit ($)	Credit ($)
a	Sep 1	Prepaid rent	12000
		To Cash		12000
b	Sep 1	Cash	55200
		To Unearned revenue		55200
c	Sep 1	No Journal entry required
d	Sep 1	No Journal entry required

2

Transaction	Date	Particulars	Debit ($)	Credit ($)
a	Sep 30	Rent expense ($12000 / 6 months)	2000
		To Prepaid rent		2000
b	Sep 30	Unearned revenue ($55200 / 12 months)	4600
		To Ticket revenue		4600
c	Sep 30	Accounts receivable	1900
		To Rent revenue		1900
d	Sep 30	Salaries expense	3100
		To Salaries payable		3100

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