Question

Bramble University sells 6,500 season basketball tickets at $40 each for its 13-game home schedule.
(a) Give the entry to record the sale of the season tickets.
(b) Give the entry to record the revenue recognized after playing the first game.

Answer 1

Answer:

a. The entry to record the sale of the season tickets would be as follows:

                    Debit                        Credit

cash          $260,000

Unearned ticket revenue        $260,000

b. The entry to record the revenue recognized after playing the first game would be as follows:

                                                 Debit                     Credit

Unearned ticket revenue          $20,000

Ticket revenue                                                       $20,000

Explanation:

a. In order to Give the entry to record the sale of the season tickets we would have to make the following calculation:

Cash=6,500*$40

Cash=$260,000

Therefore, entry would be as follows:

           

                     Debit                        Credit

cash          $260,000

Unearned ticket revenue        $260,000

b. In order to Give the entry to record the revenue recognized after playing the first game we would have to make the following calculation:

unearned ticket revenue=$260,000/13

unearned ticket revenue=$20,000

Therefore, entry would be as follows:

           

                                                   Debit                     Credit

Unearned ticket revenue          $20,000

Ticket revenue                                                       $20,000