Question

Ticketsales, Inc., receives $5,000,000 cash in advance ticket sales for a four-date tour of Bon Jovi. Record the advance ticket sales on October 31. Record the revenue earned for the first concert date of November 5, assuming it represents one-fourth of the advance ticket sales.

Answer 1

31-Oct

Dr Cash $5,000,000

Cr To Unearned Ticket revenue $5,000,000

05-Nov

Dr Unearned Ticket revenue $1,250,000

Cr To Ticket Revenue $1,250,000

Step-by-step explanation:

Preparation of the Journal entry to record the advance ticket sales on October 31.

Since we were told that the company receives the amount of $5,000,000 cash in advance ticket sales this means that the transaction will be recorded as:

31-Oct

Dr Cash $5,000,000

Cr To Unearned Ticket revenue $5,000,000

Preparation of the Journal entry record the revenue earned for the first concert date of November 5

Since we were told that the company receives $5,000,000 cash in advance ticket sales for a four-date tour of Bon Jovi this means that the transaction will be recorded as:

05-Nov

Dr Unearned Ticket revenue $1,250,000 ($5,000,000*1/4)

Cr To Ticket Revenue $1,250,000