Question

The following transactions are July activities of Bill's Extreme Bowling, Inc which operates several bowling centers:

a. Bill's collected $12,000 from customers for services related to games played in July.
b. Bill's billed a customer for $250 for a party held at the center on the last day of July. The bill is to be paid in August.
c. The men's and women's bowling leagues gave Bill's advance payments totaling $1,500 for the fall season that starts in September.
d. Bill's received $1,000 from credit sales made to customers last month (in June).

Prepare journal entries to record the above transactions.

Answer 1

Answer:

                                                   Dr.          Cr.

a.

cash                                      $12,000

Service revenue                                  $12,000

b.

Account receivable             $250

Service revenue                                  $250

c.

Cash                                     $1,500

Unearned revenue                              $1,500

d.

Cash                                     $1,000

Account receivable                             $1,000

Explanation:

a. Cash revenue earned is recorded simply as cash sale transaction.

b. Billed customer created a receivable against revenue.

c. Cash received in advance will be recorded as unearned revenue because the services have not been provided yet.

d. cash received from credit customer will decrease the receivable value.

Answer 2

Journal Entries for the month of July are given in the attachment.

What is Journal Entry?

Journal entry refers to a primary record of transactions and events. The journal entry is recorded giving dual effects to every transaction, debit and credit.

Journal entry supports the preparation of financial statement by keeping detailed records of financial transaction. It therefore acts as a base for other subsidiary books.

Learn more about Journal Entries here:

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