Question

Washburn University sells 3,500 season basketball tickets at $80 each for its 10-game home schedule.

(a) Give the entry to record the sale of the season tickets. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(b) Give the entry to record the revenue recognized after playing the first home game. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

Answer 1

Concepts and reason

Recognition of revenue: Revenue is an amount earned on the sale of goods or services provided to an outsider, known as customer or client. Based on accrual basis of accounting, revenue is recognized only as and when it is earned and realized or realizable.

Fundamentals

Journal entries: Journal entry is a way of recording a transaction in the books of accounts. It is prepared based on the debit and credit rules of the three types of accounts namely real, personal and nominal accounts. The rules to prepare the journal entries are as follows:

Real accounts: Debit the incoming items and credit the outgoing items.

Personal accounts: Debit the receiving party and credit the paying party.

Nominal accounts: Debit all the expenses made and credit all the incomes earned. Both are revenue in nature.

a.

Prepare the journal entry for the sale of season tickets as shown below:

b.

Prepare the journal entry for the sale of basketball tickets as shown below:

Ans: Part a

Part b