Question

The following transactions are July activities of Bennett’s Bowling, Inc., which operates several bowling centers, offering customers lanes for games and merchandise for sale. Bennett’s collected $14,800 from customers for games played in July. Bennett’s sold bowling merchandise inventory from its pro shop for $8,100; received $2,400 in cash and customers owed the rest on account. [Consider only the effect on revenue here. Do not consider cost of goods sold for this question.] Bennett’s received $3,400 from customers who purchased merchandise in June on account. The men’s and ladies’ bowling leagues gave Bennett’s a deposit of $2,800 for the upcoming fall season. Prepare the journal entry for the above transactions.

Answer 1

The journal entry for the transactions can be prepared as follows: Accounts Receivable and Cash are debited, Revenue and Unearned Revenue are credited.

Step-by-step explanation:

The journal entry for the above transactions can be prepared as follows:

1. Debit: Accounts Receivable
   Credit: Revenue
   Amount: $14,800
2. Debit: Cash
   Credit: Revenue
   Amount: $8,100
3. Debit: Accounts Receivable
   Credit: Revenue
   Amount: $2,400
4. Debit: Cash
   Credit: Unearned Revenue
   Amount: $2,800

The first transaction represents the collection of cash from customers for games played in July, which is recorded as revenue. The second transaction represents the sale of merchandise inventory and the cash received, which is also recorded as revenue. The third transaction represents the collection of cash from customers who purchased merchandise in June on account, which is recorded as revenue. The fourth transaction represents the receipt of a deposit from the men's and ladies' bowling leagues for the upcoming fall season, which is recorded as unearned revenue.